Clothing firm Urban Brands files for Chapter 11
BANGALORE (Reuters) - Women's clothing company Urban Brands Inc filed for Chapter 11 bankruptcy protection in a U.S. court early on Tuesday, after three straight years of losses.
The company listed estimated liabilities in the range of $100-$500 million and estimated assets of $10-$50 million, court documents showed.
Urban Brands' unit Ashley Stewart designs and markets plus-size female fashion apparel and has more than 200 stores located in urban areas from New York to Los Angeles.
Despite the strength of the Ashley Stewart brand name, the clothing company began suffering liquidity problems as economic conditions worsened, according to the court papers.
Although in 2009 Urban Brands improved on its 2008 net loss of $44.3 million, it still made a loss of $28.6 million, and sales fell to $174.6 million from $179.6 million.
Urban Brands said the best option available now is to preserve the business as a going concern and maximize the value of the company's assets by pursuing a sale.
The company said it had signed a non-binding letter of intent with New Ashley Stewart LLC for the sale of its assets.
Urban Brands said it expected New Ashley to execute the asset purchase agreement on or shortly after the bankruptcy petition date.
The fashion clothing maker also reiterated in its court filing that "the going-concern sale of its business presents the best opportunity to maximize recoveries for creditors and preserve thousands of jobs for the employees."
The case is IN re: Urban Brands Inc, Case No. 10-13005, U.S. Bankruptcy Court, District of Delaware.
(Reporting by Sakthi Prasad in Bangalore; Editing by Will Waterman)
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