01 Apr Rock & Republic plans to reorganize, build growth platform on core apparel and footwear business
Excerpt of press release by Rock & Republic
Chapter 11 Filing Will Ease Balance Sheet Pressures Turnaround Expert Named Chief Restructuring Officer DIP Financing Facility of up to $7.5 Million Obtained
LOS ANGELES, Cal., April 1, 2010 – Rock & Republic, a premier global lifestyle brand of denim apparel and accessories, announced today that the Company has filed a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, Southern District of New York. Under Chapter 11, the Company will continue to operate its business under Court protection from creditors, while seeking to develop and implement a reorganization plan.
Rock & Republic, whose products are sold in upscale department stores such as Bergdorf Goodman, Bloomingdales, Harrods, Neiman Marcus, Nordstrom, Saks Fifth Avenue, specialty retailers and the Company’s own freestanding stores, said the filing would ease pressures on its balance sheet, allow it to focus on its core apparel and footwear business and strengthen its operations to support continued growth.
The Company has named Geoffrey D. Lurie to the position of Chief Restructuring Officer. Mr. Lurie previously led the turnaround of The North Face and has more than 30 years of experience in managing and consulting with companies in transition. He recently joined Marvin Traub Associates, Inc. as head of its restructuring practice. In addition to providing assistance to Rock & Republic in restructuring its financing and operations, Marvin Traub Associates will provide strategic advice on the Company’s brand positioning and products. Rock & Republic noted that the creation of the Chief Restructuring Officer position would free Company founder and CEO Michael Ball to focus on product development and the creative vision for the brand.
“Rock & Republic is an iconic brand that defines a cool, edgy and sophisticated aesthetic, and has enjoyed tremendous growth since Michael Ball launched the brand in 2002,” said Mr. Lurie. “The Chapter 11 filing is a strategic action that will alleviate balance sheet burdens and enable us to adopt the financial and operational initiatives needed to support the brand’s growth needs. We are confident that this is the right move for Rock & Republic, our valued retailers and suppliers and our employees.”
Mr. Lurie added, “The pillars of our restructuring strategy include strengthening the Company’s financial capacity, realigning its product focus and enhancing its operational execution. Toward that end, we are exploring financial relationships that can provide the resources to support our near-term capital needs and long-term growth objectives, and we are serious about satisfying outstanding financial obligations. At the same time, we will be sharpening our product focus to emphasize the core apparel and footwear businesses that have been the foundation of Rock & Republic’s brand reputation, while seeking alternatives for ancillary product lines. Finally, we are committed to a disciplined execution of the business, in order to be the best possible partner for our retailers and distributors.”
Rock & Republic has obtained a commitment for a debtor-in-possession (DIP) credit facility of up to $7.5 million from CIT Group/Commercial Services Inc. The DIP facility is subject to Bankruptcy Court approval and other customary terms and conditions.The Company has engaged the investment banking firm Atlas Strategic Advisors, LLC, subject to Bankruptcy Court approval, to assist Rock & Republic in recapitalizing the balance sheet and exploring long-term financial partnerships.