- Angela Gonzalez-Rodriguez |
Earlier this week, Frederick’s of Hollywood filed for Chapter 11 bankruptcy protection after closing all its stores. Aimed to deal with the increasing debt, the lingerie retailer said it had reached an agreement with Authentic Brands Group.
In virtue of the deal, Authentic Brands Group will pay 22.5 million dollars and 25 percent of future brand revenue for Frederick’s website, inventory and intellectual property. If other offers materialize, the company will hold a court-authorized sale process and auction, adds the legal document.
On April 15, Frederick’s closed all its stores across the country and said it would only be selling its merchandise online. But even before the store closings, the company was already preparing to file for bankruptcy protection.
As detailed by the retailer in the filing, its assets amount to 36.5 million dollars, while its debt is valued at 106 million dollars.
In Chapter 11 papers filed Sunday in U.S. bankruptcy court in Wilmington, Delaware, major unsecured debtors are listed as Longray Intimates in Diamond Bar, Calif., owed 2.4 million dollars; the Shops at Mission Viejo shopping center, owed 1.8 million dollars; Moac Mall Holdings, parent company of the Mall of the Americas, in Bloomington, Minn., owed 1.2 million dollars; Macerich’s Fashion Fair mall in Fresno, Calif., owed 934,962 dollatrs; the Westfield Culver City mall, owed 672,932 dollars and the Macerich Lakewood Center mall, owed 626,186 dollars.
In its filings, Frederick’s said it will seek to obtain 11 million dollars in bankruptcy financing from its current lender, Salus Capital Partners, which is owed 33 million dollars in secured debt.
Frederick’s of Hollywood was founded in 1947 by Frederick Mellinger. This is the second time the retailer seeks for bankruptcy protection, as it previously did it in 2000 but emerged from bankruptcy in late 2002. Through a reverse merger, it went public.
In 2014 the retailer returned to be in hands on private investors for circa 25 million dollars.