CENTRIC BRANDS’ REORGANIZATION PLANS APPROVED

Centric Brands is preparing to exit bankruptcy after the federal bankruptcy court for the Southern District of New York approved its plans to reorganize.

The company which owns Robert Graham, Hudson, and Swims, among others, said that it expects to exit Chapter 11 by the end of October as a private company backed by Blackstone, Ares Management Corporation, and HPS Investment Partners.

Jason Rabin, chief executive officer of Centric Brands, described the court’s approval as “a critical moment in our journey to emerge as an even stronger company, poised for long-term growth.”

“Today’s announcement represents a critical moment in our journey to emerge as an even stronger company, poised for long-term growth,” said Rabin. “I am truly grateful to our dedicated employees for their hard work throughout this process and the COVID-19 pandemic. I’m also appreciative of the continued support of our brand licensors, retailers, sourcing network, and lenders, which has allowed us to reach this milestone.”

Blackstone is expected to swap its second-lien debt for equity in the new company. Ares and HPS plan to keep their senior loan positions and also receive equity.

Centric also said it “expects to secure new exit financing in the form of a new securitization facility, as well as new revolving and term loan facilities from its current secured lenders, which will help fund the company’s exit from Chapter 11 and its go-forward operations.”

Centric Brands, which is the licensee to more than 100 fashion brands, succumbed to its debts in May as part of the first wave of Coronavirus-induced fashion bankruptcies. In addition to licensing brands from others — Centric has worked with Nautica, Michael Kors, All Saints, Jessica Simpson, and many more — the company also owns Zac Posen, just acquired in February.