Rock Star Menswear Fashion Designer John Varvatos Enterprises Inc, being the 2nd fashion brand to buckle under the weight of the Covid-19 pandemic via being in a weak position before the pandemic forced them to close all stores, which nixed it’s corporate comeback efforts. Delaware is the state where the Chapter 11 bankruptcy was filed, with an asset listing of about 50 million with debt and liabilities of about $140 million. To make matters worse, the brand is entangled in a class action suit with a $3.5 million claim.
The New York company is planning to sell itself for an unknown amount to one it’s creditors which is an affiliate of Lion Capital LLC. The brand started in 2000 with it’s edgy modern classic aesthetic, which appealed to celebrities and rock stars. The trouble began in 2015 when an attempt by manager to implement “cost cutting measures” which altered the brands style to attract a more “mass market” customer backfired when it’s “existing customers” didn’t take kindly to the change.
(John Varvatos, Ringo Starr and Barbara Bach)
Nordstrom Inc. three years later, removed a few of Varvato’s brands from it’s stores, which caused an 2018-2019 profit loss of $2.6 million for the company, and launched an internal reorganization which seemed to be gaining traction, but was derailed by the Covid-19 epidemic. on March 18th they laid off 200 employees as they had to close all stores. Online sales is unable to meet debts, with rents of about $2.1 million a month, and inventory orders for spring 2020. The current “Retail Apocalypse” seems to be wreaking havoc on existing brands already laden with huge debt, spurred by the Corona Virus pandemic. Some of these brands may disappear for good.