The US arm of apparel brand Diesel has filed for bankruptcy protection – a move that will allow the company to reorganise while continuing its day-to-day operations.
Diesel is owned by Only the Brave, whose other brands include Viktor & Rolf, Maison Margiela, Staff International, Brave Kid, Marni and Paula Cademartori.
According to the Chapter 11 petition for bankruptcy protection filed with a court in Delaware, Diesel USA Inc indicated it has racked up as much as US$50m in debt.
The company has 28 retail stores in the US. In the court filing, Mark Samson, chief restructuring officer, said that since 2014 Diesel’s sales “declined precipitously while its losses have mounted” due to the factors “plaguing retail in general” as well as the long-term effects of certain strategic decisions made by prior management in an effort to effect a post-recession turnaround.
In a statement to just-style, Diesel USA Inc said it remained “fully committed” to the market.
“The filing is a critical step in enabling Diesel USA to address certain long-term liabilities for a healthier and stronger business in the country (“fresh start”), building a dynamic brand presence in line with the evolving US retail environment.
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By GlobalData“This procedure opens the way to a redefinition of the brand’s geographic footprint in the United States, a strategic roadmap that will include some important milestones in 2019, such as refitting and reviewing most of its retail store network, and making sure the retail footprint meets the needs of the existing consumer but also of new ones; strengthening its e-commerce presence and redoubling its commitment to innovation; and a series of key wholesale partnerships to give resonance to Diesel’s collections and special products, with tailored buying and distribution activities planned for each.
“The company remains fully committed to the US market, a unique and fundamental window to be an important player globally.”
