UPDATE 2-Betsey Johnson LLC files for bankruptcy protection
* Says economy had devastating impact on higher-end fashion
* Says profitability more than halved since 2007
* Says so far unable to find a buyer or investor
April 27 (Reuters) - U.S. fashion designing house Betsey Johnson LLC filed for Chapter 11 bankruptcy protection on Thursday, citing declining sales and profitability, and said it was seeking offers to buy all or parts of its business, court documents showed.
The fashion house listed total assets of $21.3 million and total liabilities of $15.4 million at the end of 2011, according to the company's balance sheet that was filed with a U.S. bankruptcy court in New York.
Betsey Johnson LLC, which runs over 65 Betsey Johnson retail stores worldwide and also sells products to department store operators like Nordstrom Inc and Macy's Inc, said it had so far been unable to find new buyers or investors.
In the filing, the company said sales at its retail stores have fallen more than 20 percent and profitability has more than halved since 2007.
"The economic recession had a devastating impact on higher-end fashion apparel brands, including Betsey Johnson Fashions," the company said, adding that cash constraints had left it unable to turn the situation around.
For the fiscal year ending Dec. 31, 2011, Betsey Johnson generated sales of nearly $60 million, but recorded a negative EBITDA of about $5.7 million.
On its corporate website, the company says its namesake owner, known for her bold and over-the-top styles, started the fashion label in 1978 in partnership with former model Chantal Bacon.
The chain sells a mix of rock-n-roll and hippie-themed clothing, cocktail dresses and accessories that are mostly aimed at younger women.
In mid-February 2012, the company engaged Morpheus Capital Advisors LLC to help find new equity investors or sell the business. Morpheus reached out to 22 potential buyers but was unable to secure a deal, the company said in the filing.
Having failed to find a prospective buyer, Betsey Johnson LLC filed for chapter 11 bankruptcy protection in an effort to "maximize the value of its assets for the benefit of creditors," according to the court filing.
The company said its primary objective is to strike an all-asset sale, either as a going concern or through an orderly wind-down process using a nationally recognized liquidator.
The company has requested the court to approve a Debtor-in-Possession (DIP) financing of $2.5 million, which would be used to fund the operations until the sale process is completed.
The case is in re: Betsey Johnson LLC, Case No.12-11732, U.S. Bankruptcy Court, Southern District of New York.