The company that owns Betsey Johnson’s boutiques is bankrupt, and as a result most of the designer’s freestanding stores will close between May and July.
In a statement, the company said that it’s spent months “rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash flow problems,” to no avail. “After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming.”
Betsey Johnson LLC operates 63 of the designer’s eponymous boutiques in the United States, Canada, and England. An executive at the company told WWD that some 350 people will be out of work when the stores close, but executives at Steve Madden — which saved Betsey Johnson from collapse in 2010 when it bought Johnson’s $48.8 million debt — wouldn’t confirm how many people would be affected.
Johnson herself won’t lose her job. She’s staying with the company as creative director and will focus on the lower-priced Betsey Johnson label sold in Macy’s and other department stores. “I love the moderate price range,” Johnson said. “It is in sync with all the girls who are buying my clothes.” Mr. Madden said that the closure wouldn’t interrupt wholesale deliveries to stores that sell Betsey Johnson and that there would be no impact on ecommerce availability.
Johnson executives are arranging an auction to determine which company will handle Betsey Johnson LLC’s liquidation on May 8.