John Varvatos Files Bankruptcy, Starts Sale to Lion Capital
American’s leading menswear design house, John Varvatos Enterprises Inc., has filed for Chapter 11 as part of a plan to sell itself for an undisclosed amount to an affiliate of one of its creditors, Lion Capital LLP.
The move is part of Varvatos firm restructuring as it sought bankruptcy protection from creditors in the fallout from the Covid-19 pandemic. Varvatos listed more than $140 million of debt in court filings in Delaware Wednesday.
John Varvatos Enterprises was founded in 2000 and rose to become one of America’s leading menswear design houses holding its own on an international stage and generating some of menswear’s most dynamic advertising which traditionally featured prominent rock stars. John Varvatos now represents an entire men’s lifestyle that includes footwear, bags, belts, eyewear, jewelry, fragrances, the John Varvatos Star USA collection, and Bootleg by John Varvatos.
Lion Capital made initial investments in John Varvatos in 2012 and also has investments in contemporary label All Saints and denim label Paige.
The agreements with Lion represent a critical step in our process to transform our business to drive long-term, sustainable growth. We have taken decisive action to respond to the challenges that all retailers face in the present environment and we remain extremely confident that our brand, celebrating its 20th year in business, will emerge even stronger. We have a passionate team, a fierce global consumer following, and a commitment to our customers, whom we expect to serve for many years to come.
– John Varvatos
The sale to Lion Capital will be subject to approval from the bankruptcy court and may include a court-supervised auction in which other bidders may offer a higher price for the company’s assets.
Along with the rest of the luxury retail industry, John Varvatos Enterprises has been greatly impacted by the negative effects of the coronavirus pandemic. In the months immediately preceding the pandemic, John Varvatos Enterprises established a talented new executive leadership team. In response to the rapid and exponential spread of COVID-19 as well as relevant governmental orders, the company temporarily closed all store locations.