Monday, April 5, 2010

Rock and Resession

This week Los Angeles-based company Rock and Republic filed for Chapter 11 bankruptcy protection in New York late Thursday evening.

The restructuring will allow Rock & Republic to “ease pressures on its balance sheet,” the company said, in a release. Rock & Republic, which sells its wares at upscale stores such as Saks Fifth Avenue and Bloomingdale's and has collaborated with celebrities such as Victoria Beckham, cited assets between $50 million and $100 million and liabilities of $10 million to $50 million. But who knows this sad news may just lead to a sick sale for us resessionistas! 

Also in hot water is American Apparel whose sales were down 10 percent last year and the brand is forecasting another ten percent decrease for the first quarter of this year, WWD reports. This, combined with stopping overseas expansion and in-store investments, and production problems, has put the retailer in a sticky spot.
"We are a young company and we haven't worked out all the kinks. Right now we are in a period of rationalization, in a period of working with less and deploying our assets more productively," Dov Charney, founder and chief executive officer of American Apparel told WWD. "That means reducing inventory, paying down debt and getting more sales out of the stores we have. We're upgrading software, improving distribution methodology and updating our point of sale systems. If there weren't any problems--then I'd be worried."

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