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True Religion Reportedly Seeks Turnaround Adviser

True Religion Apparel Inc, a US denim company whose signature products have gradually gone out of fashion, has been seeking an advisory firm to help turn around its fortunes, according to people familiar with the matter.
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By
  • Reuters

NEW YORK, United States — True Religion Apparel Inc, a US denim company whose signature products have gradually gone out of fashion, has been seeking an advisory firm to help turn around its fortunes, according to people familiar with the matter.

The move comes as shoppers' tastes have shifted away from expensive denim to comfortable athletic clothing made by companies such as Lululemon Athletica Inc that can be worn outside the gym.

Buyout firm TowerBrook Capital Partners LP, which owns True Religion, has been in talks with potential operational advisers for the company, the sources said this week.

Among the advisory firms that TowerBrook has held talks with is Harry Wilson's Maeva Group LLC, the people said. A former private equity executive, Wilson has led turnaround efforts at RadioShack Corp and was a member of the US government task force that restructured General Motors Co.

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The sources requested anonymity because the deliberations are confidential. A spokesman for TowerBrook and True Religion declined to comment. Wilson did not respond to requests for comment.

True Religion's sales have fallen, and debt tallies $454 million, but the Los Angeles company has enough cash and no near-term maturities, according to Moody's Investors Service Inc. TowerBrook took True Religion private in 2013 in a deal worth about $824 million.

Revenue for True Religion for the 12 months ended Aug. 2 was about $408 million, Moody's said.

The company was started in 2002 and became famous as celebrities including Katie Holmes, Eva Longoria and Colin Farrell donned its expensive denim. Some jeans are priced above $300 on True Religion's website.

Premium-priced jeans have spurred investments from companies and private equity firms, and Paige Denim hired investment bankers for a sale last year.

True Religion also makes stretchy jean leggings, but sales had fallen significantly in its women's line even before the "athleisure" trend, Moody's said.

Last year, True Religion brought in a new chief executive officer, John Ermatinger, to accelerate its growth, according to a statement at the time.

By Jessica DiNapoli; additional reporting by Lauren Hirsch; editor: Lisa Von Ahn.

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