Bankruptcy court approves terms of BCBG offer
A New York bankruptcy court has ordered that Global Brands and Marquee are approved to purchase the struggling BCBG Max Azria for $165 million and assume the label's intellectual property for future operations.
The U.S. Bankruptcy Court specifically approved Global Brands and Marquee's bid to assume BCBG's intellectual property rights. The label's intellectual property was a key asset for Global Brands and Marquee who plan to license the name across new categories and markets.
Additionally, the court approved the plan to continue operating 20 brick and mortar retail stores across Los Angeles.
As part of the bankruptcy procedure, entities offered the court bids to gain a financial interest in BCBG. The winning bid was made by a group of four organizations. Marquee bid $106 million for BCBG's intellectual property rights. Global Brands bid $23 million for BCBG's retail operations and inventory.
The remaining $36 million of the offer was comprised of bids from Hilco Global, a financial services company based in Illinois, and Boston-based investment firm Gordon Brothers.
The court had imposed a deadline of June 20 for offers. This group of bids was the only offer before the court which essentially guaranteed its approval.
The new owners of BCBG have their work cut out for them. The company is currently operating with almost half a billion dollars of debt. It reported $10 million in losses from retail stores it shuttered in 2016. It still operates over 275 shop in shop boutiques with wholesale partners including Macy's, Bloomingdale's, and Lord & Taylor.
In addition to bankruptcy restructuring, the company will have to deal with a lawsuit filed by former chief creative director Lubov Azria. She has sued for $6.7 million in lost wages resulting in what she alleges was wrongful termination. Her initial lawsuit requesting $7 million was dismissed. The next hearing for her individual case is at the end of next month.
Going forward, BCBG hopes to find local partners to assume operating retail locations globally. The brand has stores in Japan, France and Canada that may close if no future deals are made in those respective countries.
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