The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LOS ANGELES, United States — Frederick's of Hollywood Group Inc., known for its racy women's leisurewear, filed for bankruptcy after closing all its stores to compete online with rivals including Victoria's Secret.
The Los Angeles-based company notified customers on its website that it had closed all its brick-and-mortar locations and the products could be bought on the Web. The company listed less than $50 million in assets and as much as $100 million in debt in Chapter 11 papers filed Sunday in U.S. bankruptcy court in Wilmington, Delaware.
Frederick’s will ask a judge for permission to establish a senior secured loan from Salus Capital Partners LLC and affiliates, said William Soncini, the chief operating officer, in the petition. Needham, Massachusetts-based Salus is also among the largest unsecured creditors with a claim listed as “undetermined.”
Last year, Frederick’s was taken private for about $24.8 million by investors led by a unit of New York-based Harbinger Group Inc., according to a statement. Harbinger wrote off $60.2 million in goodwill impairment related to Frederick’s in a February regulatory filing.
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At the time of the Harbinger deal, Frederick’s had 94 women’s clothing stores.
Frederick’s, founded in 1947, paved the way for companies like L Brands Inc.’s Victoria’s Secret, introducing U.S. women to push-up bras and thong underwear, according to its website.
The company previously sought bankruptcy protection in July 2000 and received court approval of its exit plan in December 2002, according to court documents.
The past two years have seen a number of women’s clothing retailers head into bankruptcy, including Loehmann’s, Dots and Delia’s. A slowdown in mall traffic and the growth in online shopping have been blamed for the trend.
The case is In re: Frederick’s of Hollywood Group Inc., 15-10837, U.S. Bankruptcy Court, District of Delaware (Wilmington).
By Michael Bathon, Phil Milford; editors: Andrew Dunn, David Glovin.
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