07/13/12 - 0 Comments
Betsey Johnson’s Bankruptcy Woes
Blonde hair, pink tutus and, of course, a cartwheel here and there are what we usually associate with 69-year-old American designer Betsey Johnson. Who would’ve ever thought that bankruptcy would be added to the long list of otherwise positive terms?
If you follow the business side of fashion—not just what’s being shown on the runway—then you might have seen this coming. In 2010, during a time of financial woe for the Betsey Johnson LLC, Steve Madden bailed her and her company out with the purchase of a loan. The agreement stated that if the $48 million dollar loan was not paid off by August 20, 2012, Madden would assume full ownership of the brand, many of Betsey’s personal assets (her business partner Chantal Bacon included) and any intellectual property that the company owns.
With Betsey Johnson LLC filing for a chapter 11 bankruptcy, her company has obviously suffered a remarkable loss ranging from their eCommerce to their retail chain stores. Betsey Johnson designer boutiques have already been closed (and hundreds of employees let go) as liquidation sales began—starting at 25% and scaling upwards of 80%—in hopes that the revenue from such extreme discounts would be enough to pay off the company’s creditors.
Johnson isn’t the first designer to file for bankruptcy since the economic crisis of 2008. It has also been an unfortunate reality for a slew of designer fashion houses, including Christian Lacroix, Yohji Yamamoto and Balmain.
Though this may very well seem like the end of the high end retailer, it certainly isn’t the end of the designer. Even with nearly all of her boutiques closing worldwide, the spunky, young-at-heart talent will keep her department store goods, accessories and a handful of other licenses.
Reports, however, say that even with the bankruptcy, we can rest assured that we will see Johnson this fall, as she is already busy at work with the production of a runway show for September. For those of us fans of the Iconic designer, we really hope to see more of her wild and over-the-top collections. We’re pulling for ya, Betsey—we still have faith in the Betsey Johnson brand and what’s in store next!
Photo credit: jezebel.com