Jeans maker Diesel USA files for bankruptcy
Diesel USA Inc, the denim and accessory brand known for its jeans, filed for bankruptcy on Tuesday, blaming mounting losses, a sales plunge, expensive leases and cyber fraud.
The New York-based unit of Italy`s Diesel SpA filed for Chapter 11 protection from creditors with the U.S. bankruptcy court in Delaware. Its parent is not part of the filing.
Diesel USA said it has been the sole distributor of Diesel products in the United States since its 1995 launch.
But it said it has not been spared in the recent downturn in the retail sector, having lost money for six straight years as annual sales plunged 53 percent, to $104 million. Theft and cyber fraud cost $1.2 million over three years, it added.
In a court filing, Chief Restructuring Officer Mark Samson said Diesel USA has no plans to close, but intends to exit some of its 28 stores, where landlords` refusal to offer lease concessions has led to heavy losses.
He said the company`s three-year business plan contemplates focussing on more profitable stores, improving its product lines and working with social media "influencers" to attract Millennials, "Generation Z" and other new customers.
A successful reorganization would enable Diesel USA to operate as an "iconic and profitable brand," Samson said.
Many other retailers have gone bankrupt in recent years as more consumers shop online.
Recent victims have included shoe chain Payless Inc, which said last month it will close its roughly 2,500 stores.
The Diesel USA bankruptcy followed a Feb. 13 announcement by Levi Strauss & Co, which invented blue jeans in 1873, that it plans to return to the U.S. stock market after a 34-year hiatus, through an initial public offering.
Diesel USA said it has $50 million to $100 million of assets, and $10 million to $50 million of liabilities.
The case is In re Diesel USA Inc, U.S. Bankruptcy Court, District of Delaware, No. 19-10432.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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