DIESEL USA FILES FOR BANKRUPTCY
Diesel USA, the denim and accessory brand known for its jeans, filed for bankruptcy on Tuesday, blaming mounting losses, a sales plunge, expensive leases,
The New York-based unit of Italy’s Diesel SpA filed for Chapter 11 protection from creditors with the U.S. bankruptcy court in Delaware. Its parent company is not part of the filing.
Diesel USA said it has been the sole distributor of Diesel products in the United States since its 1995 launch.
But it said it has not been spared in the recent downturn in the retail sector, having lost money for six straight years as annual sales plunged 53 percent, to $104 million. Theft and cyber fraud cost $1.2 million over three years, it added.
In a court filing, chief restructuring officer Mark Samson said Diesel USA has no plans to close, but intends to exit some of its 28 stores, where landlords’ refusal to offer lease concessions has led to heavy losses.
He said the company’s three-year business plan contemplates focusing on more profitable stores, improving its product lines and working with social media influencers to attract Millennials, Generation Z, and other new customers.