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    Diesel US Companies Apply For Bankruptcy Of Retail Knockout Victims

    2019/3/8 12:38:00 72

    Diesel

    According to "women's Wear Daily", the American company of Italy denim clothing brand Diesel filed for bankruptcy in Delaware on Tuesday, and proposed a three year reform plan to correct the company's strategy of leasing stores in high-end locations.

    According to public information, the company has been losing money for six consecutive years, and its annual sales have dropped by 53% to 104 million dollars in six years, and the debt is as high as 50 million dollars.

    "Previous management has been using the real estate strategy to invest heavily in Diesel's retail stores," Mark Samson, chief reorganisation officer of Diesel's US company, said in a court statement submitted on Tuesday. "From 2008 to 2015, management spent $90 million on the capital expenditure of the company for the entity store project."

    Although Samson has tried to renegotiate the tenancy agreement with landlord more than 1 years ago, it has never been able to get a single rent discount.

    In addition, Diesel has been the victim of several burglary and fraud incidents (including several fraudulent Internet frauds involving fraudulent invoices). In the past three years, Diesel has suffered an additional loss of US $1 million 200 thousand in this area.

    Diesel, famous for its high-end denim, was founded in the early twenty-first Century when the denim trend was in full swing. At that time, consumers rushed to designer jeans, such as Diesel, 7 For All Mankind and True Religion, which cost more than 200 dollars or more on a pair of jeans.

    Diesel established the Diesel branch of the United States in 1995, and has always regarded it as the exclusive distributor of Diesel products in the US market.

    According to court documents, Diesel US companies recovered from the recession in 2008, when the former management wanted to quickly restore the company to its peak, so expensive rent was spent on opening shops.

    Now the company can hardly afford to spend on these stores.

    However, unlike other retailers announcing large-scale closure of stores, Diesel's US company is not planning to close. In its revival brand plan, it said it would open some new stores at lower rents and pform some hotels to reduce its operating costs.

    In addition, its Transit plan also requires Diesel's US companies to work with social media influencers and increase the cowboy series for female customers.

    In fact, in recent years, the denim category has been struggling with the pformation of the American fashion style. Many cowboy brands have launched more sportswear jeans in recent years, which has made the sales of jeans again begin to rise after years of steady decline.

    Some cowboy brands also took the opportunity to reopen the market, for example, the American cowboy clothing company Levi & S & C announced a listing plan a few days ago.

    Although the bankruptcy application does not involve Diesel's parent company in Italy, it is still a big blow for Diesel.

    So far, Diesel's US division has listed $7 million 400 thousand of unsecured debt to trade creditors, and the company said it would become a landmark and profitable brand if it could be restructured successfully.

    Source: Interface

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