Fashion label BCBG Max Azria borders on bankruptcy

American fashion label BCBG Max Azria is allegedly filing for bankruptcy later this week. This is also bad news for its more than 200 stores in the United States, which would probably all need to shut down.

Enormous debt

Apparently, BCBG Max Azria already informed shopping malls of its impending store closures, but its owner, investment firm Guggenheim Partners, refused to respond to the rumours. Enormous debs and delayed rental payments are just some of the financial issues the company faces, but it had previously stated it was looking at other options than bankruptcy. However, that procedure may actually turn out to be its best defense against debtors.

The entire situation would be the latest step in the company’s downfall. A mere four years ago, a possible sale could have generated 1 billion dollars (950 million euro), but the move failed to materialize. Subsequently, a restructuring plan in 2015 and a 135 million dollar (125 million euro) investment had to turn the tide, but its retail turnover slipped 20 % over the past three years, down to 570 million euro.

BCBG Max Azria could become the next fashion chain, like American Apparel and The Limited, to succumb to the immense competition in the fashion industry.