According to court documents, long-time jeans maker, True Religion, had over $547 million worth of liabilities and only around $243 in assets at the time of filing for Chapter 11 Bankruptcy earlier this month. To fans of True Religion clothing: don’t start sobbing yet. The store may not be riding off into the sunset at this time.
Representatives of the company expressed in a press release that True Religion has a deal underway with its creditors to reduce its debt by $350 million in exchange for part ownership of the company.
Translation: you will still be able to get ahold of your favorite pair of True Religion jeans, despite the company’s current financial hardships.
A Chance for Restructuring
Representatives recently voiced True Religion’s desire for a second chance, a chance to re-structure itself completely. This overhaul will include closing dozens of underperforming stores, renegotiating lease terms to cut back on overhead costs, and laying off a number of employees.
True Religion’s chief financial officer, Dalibor Snyder, says that if the restructuring plan is successful, the company will reduce its debt load by 72%
As well, True Religion will aim to grow their online presence and “invest in growing our digital footprint,” shares John Ermatinger, the company’s CEO.
Online Retailers’ Success Means Trouble
Losing business to online competitors is a threat to a great deal of brick and mortar companies, due to the rise of online retail over the past decade. Any company seeking to stay in the ‘retail game’ must maintain an ever-evolving online presence. This includes running a contemporary, user-friendly website, providing fast and friendly customer service, orchestrating deals on shipping and returns, and implementing a number of other virtual practices that keep an online business competitive. True Religion will be the first to admit they have not invested enough in their online presence; it is one of the several areas the company seeks to restructure in the coming years.
True Religion came to fame in Los Angeles in the early 2000s as brand-name designer jeans became ever more popular. However, the specific trends that helped True Religion rise to power have since (like all trends) passed, and if the company expects to survive in the current fashion climate, it must now carve out a new space for itself…a space that also includes new clothing and branding designs.
Consumer Interest Shifts
With the rise of athletic wear becoming “everyday wear” True Religion failed to recognize and adjust to the shift that consumers were making from denim to leggings and stretch pants. With companies like Lululemon setting the pace—and with new yoga studios popping up on every street corner—mainstream America shifted its wardrobe from denim-casual to athletic-casual. It is now not un-common to see an entire Starbucks filled with individuals sporting leggings and tank tops while purchasing their morning lattes. True Religion, however, did not shift its inventory to accommodate this change of tides.
True Religion stuck hard and strong to its traditional ‘t-shirt and jeans’ look that was once extremely popular both in California and, indeed, across the United States. The brand also stuck to large, flashy logos on their clothing, which may now be considered distasteful or out of style to younger generations.
In short: what was once the coolest look on the street now seems like a look found only in dated music videos.
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