Love Culture Seeks Suitor Amid Financial Woes

7/16/2014
Love Culture Inc. filed a voluntary petition under Chapter 11 on July 16 that will allow the company to close unprofitable stores, restructure its debts and focus its energy on improving operations in its core profitable stores.
 
Love Culture said it was investigating potential solutions to ensure the best outcome for its constituents, including a possible sale of substantially all of its assets as a going concern. To date, several financial and strategic buyers have already submitted a Letter of Intent or have indicated intent to do so.
 
"We are encouraged to see that several entities from both the financial and retail industries have expressed interest in Love Culture," said Rick Bunka, chief restructuring officer of Love Culture. "Our action today will enable Love Culture to continue to provide leading edge fashion apparel and accessories to young women in the 18-35 demographic," Bunka said.
 
In 2012, Love Culture began to experience financial difficulties as it built its infrastructure and rapidly opened new stores, despite topline growth and continued extension of the brand.  A series of large capital investments to update the company's electronic insrastructure also impacted cash flow.  Throughout the past six months, the senior management team has worked diligently to streamline costs and refocused the company's merchandizing strategies to better serve its core customer.
 
"This filing was a necessary step to get Love Culture on the right path for success.  This process will allow us to close underperforming stores while we focus our attention on improving performance in our remaining store base and e-commerce." said Bunka.  "We are grateful to our employees, vendors and creditors who are standing by us at this time, Bunka continued. "We are determined to find the best solution for everyone involved."

Love Culture is represented by Lowenstein Sandler LLP and its financial advisor is PricewaterhouseCoopers LLC.
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