Centric Brands, which owns Robert Graham, Swims, and Hudson Jeans, has succumbed to the pressure put on by COVID-19. The lifestyle brand collective has voluntarily filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York on Monday.
Centric Brands has also entered into a Restructuring Support Agreement (RSA) with its secured lenders via $435 million of debtor-in-possession financing from Blackstone, Ares Management, and HPS Investment Partners to ensure uninterrupted operations throughout restructuring.
The debtor-in-possession financing secured enables the company to continue to meet its financial obligations to its employees, licensors, suppliers, and vendors. Upon completion, Centric plans to emerge from the reorganization as a private company, held under ownership of its current lenders – mainly Blackstone, which is one of the world’s leading investment firms with approximately $538 billion in assets under management.
“The current crisis has significantly impacted companies across all sectors,” said Jason Rabin, CEO of Centric Brands. “The pandemic disrupted many of our wholesale accounts’ ordering and constrained our cash flow. However, we are confident that with added flexibility in our capital structure, we will be well-positioned for long-term success during this period and beyond. After extensive review, we determined that partnering with our current lenders to pursue this path will result in a stronger financial position and more resources to support future growth, while allowing us to focus on serving key stakeholders.”
“Our lenders understand the company’s growth plan and have a productive and trusted working relationship with its management team,” added Rabin. “Centric Brands is looking forward to benefiting from their capital, strategic insight, global relationships, and support.”