Nine West files for bankruptcy
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Fashion footwear company NineWest on Friday filed for Chapter 11 bankruptcy protection.
Why it matters: This is the latest in a growing list of private equity-backed consumer brands to go bankrupt, in large part due to large debt loads related to their originals acquisitions.
Nine West is expected to sell both its flagship and Bandolino brands to Authentic Brands, another private equity-backed company whose brands include Aeropostale and Juicy Coture. It also has secured a $300 million loan from creditors to reorganize the remaining business, which includes Anne Klein.
PE problems: Sycamore Partners bought Nine West (then known as Jones Group) for $2.2 billion in 2014, and then sold off brands like Stuart Weitzman, Kurt Geiger, and Jones New York (the last of which went to Authentic Brands). Sycamore is now being wiped out on its remaining equity, but it might have additional problems, per Reuters:
Some creditors of Nine West plan to pursue claims against Sycamore for the sale of Kurt Geiger and Stuart Weitzman... [They] will claim that the divestitures of the shoe companies made NineWest insolvent.