BCBG announced plans to close stores and restructure the company due to mounting pressure from its debt burden and more consumers opting to shop online.
The retail chain plans to shut down a number of brick-and-mortar shops and refocus on licensing, eCommerce and selling through other retailers, Seth Lubove, a spokesman for BCBG at Sitrick & Co., told Bloomberg in an emailed statement.
The global fashion brand has operated more than 570 boutiques, including more than 175 in the U.S.
But the retailer now has “too large a physical retail footprint,” Lubove explained. “In order to remain viable, the company – like so many others in its industry – must realign its business to effectively compete in today’s shopping environment.”
According to a filing with the California’s Employment Development Department, the company has laid off 123 employees in recent months. The company has also hired advisory firm AlixPartners LP to help restructure its debt load so that it can avoid dealing with the bankruptcy court, people familiar with the situation told Bloomberg.
The fashion label was founded by designer Max Azria in 1989, opened its first store in Los Angeles in 1992 and acquired design house Herve Leger in 1998.
Though the brand is facing a cash crunch, those that spoke to Bloomberg said there are no plans to sell and bankruptcy is not seen as an imminent risk to the business.
Lubove confirmed that BCBG is s looking into a “variety of options” in its efforts to restructure the business.
“BCBG is a world-class designer and producer of apparel, which with the necessary changes, should be able to be successful,” he added.
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