(Bloomberg) -- Nine West Holdings Inc. filed for bankruptcy with a plan to sell some assets and reorganize others, after too much debt felled the shoe and clothing company controlled by Sycamore Partners.
The Chapter 11 filing in New York listing debts of more than $1 billion. The company will use the bankruptcy to sell its Nine West and Bandolino brand while reorganizing around other businesses including the Anne Klein name, according to a statement. Most creditors have already agreed to support a reorganization, and a $300 million loan will fund operations during the process, the company said.
"We will retain our strong, profitable and growing apparel, jewelry, and jeanswear businesses and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth," Ralph Schipani, Nine West’s chief executive officer, said in the statement.
Nine West carried one of the most severe debt loads in the retail industry. The company has been negotiating with its creditors at least since last year, with an eye on selling assets to raise cash. Authentic Brands Group will submit an initial bid for the Nine West and Bandolino footwear and handbag business, and an auction will test the market for higher offers, according to the statement. The profitable One Jeanswear Group, Jewelry Group, Kasper Group and Anne Klein businesses will be retained.
Kirkland & Ellis LLP is Nine West’s bankruptcy counsel, according to the filing. Among largest unsecured creditors are holders of 8.5 percent unsecured notes due 2019, a $305 million unsecured term loan, and $256 million in 6.125 percent notes due 2034.
The brand, named for its original Manhattan street address, aimed to meld comfort and fashion. But the company missed on some style changes and wound up in the hands of Sycamore, known for turning around deeply distressed retail brands. Sycamore bought Nine West as part of its 2014 purchase of Jones Group Inc. for about $2.2 billion including debt.
Since Sycamore’s founding in 2011, the New York-based private equity firm has snapped up, financed or invested in struggling retailers such as Staples, Belk department stores and Talbots.
The case is Nine West Holdings Inc., 18-10947, U.S. Bankruptcy Court, Southern District of New York (Manhattan.)
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