True Religion has filed for its second Chapter 11 bankruptcy in three years, becoming the first major retail victim of the coronavirus pandemic, according to Forbes. The company said that store closures related to the COVID-19 pandemic hurt its business, which “accelerated” liquidity constraints the retailer already faced.
True Religion has already furloughed all non-essential employees and the company sees bankruptcy proceedings as the only way to stay in business once non-essential retailers can reopen. The company listed assets and liabilities of as much as $500 million each in its petition.
“While the debtors would have preferred to wait-out the current instabilities of the financial markets and retail industry generally, they simply could not afford to do so,” said True Religion in court documents.
The retailer shed more than $350 million in debt during its 2017 bankruptcy proceedings, which also led to closing stores and investing in e-Commerce operations. True Religion has since worked to modernize its offerings, including by hiring former company President Michael Buckley as CEO and naming Zihaad Wells as Creative Director during the final months of 2019.