- Global Brands Group is moving to wind down following a Bermuda court order to do so from Nov. 5, according to a securities filing.
- Global Brands, which both owns its own brands and makes products for others, has been trying to restructure after sales declines and losses constrained its ability to service its debt.
- The company's U.S. business filed for Chapter 11 in July with the aim of selling off assets.
When GBG USA filed for bankruptcy this summer, the business was "running on fumes," according to its chief financial officer.
That arm is just one unit in a global conglomerate that took a massive financial hit with the pandemic. The parent, once part of the Li & Fung supply chain conglomerate, has been trying for more than a year to stabilize itself and forge a deal with creditors.
Not long before its North American unit went into bankruptcy, Global Brands' shares stopped trading on the Hong Kong stock exchange after the company failed to produce financials amid a fire sale of assets and creditor negotiations.
Last November, CEO Rick Darling said the company had faced challenges that were "unimaginable" and included the temporary store closures of its retail clients in the early part of 2020. That led revenue to fall by 46% and net loss to grow 37%.
Earlier this month, Global Brands said it has "continued to face increasingly serious liquidity issues." In response, its European wholesale business minimized all payments deemed not critical to the company. But the situation deteriorated all the same, and the unit's executives informed the Global Brands board it would not survive as a going concern.
Under pressure, and unable to come up with a restructuring agreement, Global Brands filed an application with the Bermuda court to wind down.
Amid the financial turmoil of this year, Global Brands has been selling off assets. This month it completed the sale of the Fiorelli brand to Centric Brands. The U.S. unit has sold its Aquatalia and Ely & Walker brands in bankruptcy, and is also looking to sell its Airband, MagnaReady, Yarrow, B New York and Juniper unltd brands, among other assets.
Earlier this year, Global Brands also sold off its South Korean Spyder business to a private equity firm, and the company's previous licenses from Authentic Brands under the Spyder and Frye brands have been reassigned to other operators.