>Lingerie designer and retailer Frederick's of Hollywood on Friday said it had failed a reorganisation plan as it looks to emerge from Chapter 11 "well before the end of the year".

Frederick's has been operating under bankruptcy protection since July 2000. The key elements of the plan include: the conversion of significant debt to equity, a liquidity provision established by members of the company's lender group, budgeted capital and marketing expenditures and the anticipated continuation of the company's senior management team.

Frederick's CEO and president Linda LoRe stated: "We are excited about this plan, it will allow an icon of American retailing to emerge from Chapter 11 and continue on a path of growth and re-branding.

"This is a sensible plan which includes investment for future growth of the company, including capital expenditures for new stores, new merchandise and marketing."

Michael Tuchin of Klee, Tuchin, Bogdanoff & Stern LLP, bankruptcy counsel for Frederick’s, added: "We anticipate that the court will approve this consensual plan within the next three months. The company fully expects to emerge from Chapter 11 well before the end of the year."

Frederick’s operates 172 stores across the US and is credited with inventing top lingerie lines such as the push-up bra and thong panty.