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CASE STUDY

John Varvatos Enterprises

Men’s Luxury Apparel Omni Channel Retailer

John Varvatos Enterprises

Men’s Luxury Apparel Omni Channel Retailer

Assisted Company with liquidity challenges, eventually leading to a Chapter 11 Bankruptcy filing during the COVID-19 Pandemic. Company’s assets were sold in the court process to a Private Equity Group. Assisted the Debtor through the Bankruptcy process. Company’s case was dismissed in April of 2021.

Challenges

  • Company had overextended its retail store base, with some very expensive leases, leading to a negative 4-wall profit in many stores.
  • Company’s Ecommerce platform expense was extremely high and resulted in a negative EBITDA for that portion of the business.
  • Extremely high level of Secured Debt.
  • Company filed Bankruptcy during the COVID-19 Pandemic, creating numerous challenges.

Solutions

  • Created a communication process with the Lenders, that resulted in providing time for the marketing of the Company and its assets.
  • Developed cash flow forecasts that made clear the required needs of the Debtor to run a successful sale and wind down process of the estate.
  • Assisted the Debtor with a variety of advice during the Bankruptcy process, including assistance with all of court reporting requirements.
  • All Secured Lenders were paid in full, all administrative and priority unsecured claims were paid in full, and there was approximately a 10% recovery to unsecured claimants.
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