Executives at John Varvatos have filed for bankruptcy protection amid a major restructure.
Founded by designer John Varvatos in 1999, the luxury menswear retailer offers a range of apparel, accessories, and fragrances, and over the years, has become known for featuring musicians and bands such as Nick Jonas, Iggy Pop, Alice Cooper, Dave Matthews, The Roots, and Green Day in its campaigns.
However, bosses announced on Wednesday that they had filed for Chapter 11 bankruptcy protection, and as part of the restructure, would be selling the business to Lion Capital, an existing investor.
"The agreements with Lion represent a critical step in our process to transform our business to drive long-term, sustainable growth," Varvatos said in a statement. "We have taken decisive action to respond to the challenges that all retailers face in the present environment and we remain extremely confident that our brand, celebrating its 20th year in business, will emerge even stronger. We have a passionate team, a fierce global consumer following and a commitment to our customers, whom we expect to serve for many years to come."
According to the U.S. Bankruptcy Code, a Chapter 11 filing permits reorganisation under the bankruptcy laws. Typically, the John Varvatos boutiques would be able to remain open, but the coronavirus crisis has curtailed any such plans.
"Along with the rest of the luxury retail industry, John Varvatos Enterprises has been greatly impacted by the negative effects of the coronavirus pandemic," a spokesperson added. "In response to the rapid and exponential spread of Covid-19 as well as relevant governmental orders, the company's leadership took difficult yet prudent steps to temporarily close all store locations and conserve cash. The restructuring and related agreements represent the effort to continue the company's legacy and to reposition the reorganised entity for long-term success."
