Nine West Holdings filed for Chapter 11 bankruptcy, and will restructure around its profitable and growing businesses, including One Jeanswear Group, The Jewelry Group, The Kasper Group and Anne Klein. The retailer received a $300 million loan from investors to fund operations during the process.
The bankruptcy process will facilitate the sale of the Nine West and Bandolino footwear and handbag business. Authentic Brands Group will submit an initial bid, and a competitive auction for the business will follow.
“This is the right step to address our two divergent business profiles,” said Ralph Schipani, CEO at Nine West in a statement. “We will retain our strong, profitable and growing apparel, jewelry and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth. Once we complete the reorganization process, our company will have meaningfully reduced debt and interest costs and be well positioned for the future.”
Nine West has approximately $1.5 billion in debt; none of which is due until 2019, but by then the retailer will have to refinance approximately $1 billion. Additionally, Nine West missed a debt payment March 15, which set off a 30-day period in which it had to either make the payment or file for bankruptcy, according to Reuters.