Betsey Johnson LLC is the designer’s licensing company, which oversees the freestanding Betsey Johnson boutiques, womenswear and e-commerce. The company has been in trouble for a while, with Steve Madden buying Betsey Johnson LLC’s outstanding debt in 2010 and taking control over the label, including the licensing agreements.
But the company’s cashflow problems remained. Now Betsey Johnson LLC will close nearly all of the designer’s 63 stores and lay off an estimated 350 staffers, reports WWD.
This isn’t the complete end of Betsey Johnson. Betsey Johnson herself will stay on as creative director to design the brand’s lower priced Betsey Johnson line, sold in Macy’s and other mass retailers, as well as oversee accessories and other licenses.
Jonathan Friedman, Betsey Johnson’s CFO, issued the following statement:
The decision to seek protection under chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash flow problems. After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming. Accordingly, our board made the determination that a Chapter 11 store closing process will likely be the best way to maximize the value of the company’s assets, for the benefit of its creditors.
Bummer. Well you can still head over to the online store. As of today they are giving an extra 40% off sale prices.