Not even our beloved fashion brands are immune to the difficult economic climate. According to WWD, Betsey Johnson LLC, the licensee that runs the brand's 63 freestanding stores, as well as its women's apparel and e-commerce, has recently filed for Chapter 11 bankruptcy. This will immediately go into effect beginning with the closing of most of the 63 stores, and even more unfortunately, the letting go of 350 employees, all within the next few weeks. The company's CFO, Jonathan Friedman, recently released the following statement regarding the bankruptcy:
"The decision to seek protection under chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash flow problems. After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming. Accordingly, our board made the determination that a Chapter 11 store closing process will likely be the best way to maximize the value of the company’s assets, for the benefit of its creditors."
Despite this surely devastating blow to her empire, Betsey Johnson will stay on as the creative director to design the lower priced line, accessories, and other licenses. Still, at almost 70 years old, Ms. Johnson understands this industry better than most in the game and will undoubtedly find a way to bounce her brand right back to the bank, even if that means scaling down.