True Religion to Focus Online After Bankruptcy Filing
Denim retailer True Religion Apparel Inc. said it filed for bankruptcy protection and will work on growing its online business. The company also said that its owner, TowerBrook Capital Partners, a private equity firm, reached a proposed deal with lenders to erase True Religion’s debt by about $350 million.
In court papers, a True Religion executive pinned the company's financial difficulties on the growth of "athleisure," a move away from denim to casual sports clothing outside of the gym, Reuters reported.
“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success,” said John Ermatinger, President and CEO of True Religion. “By dramatically improving our capital structure 24 months in advance of our term loan maturity, we will continue business operations as usual and provide our employees and business partners the long-term stability they need, while providing the necessary flexibility to invest in growing our digital footprint, building connections with customers, and improving organizational competencies."
Ermatinger said year to date adjusted EBITDA through May at $7.1 million is up 95% versus last year.
"This improved performance will allow us to enter into the next phase of our recapitalization process with confidence as we continue to execute against our strategic plan and drive the business forward.”