Fashion designer Betsey Johnson’s chain filed for bankruptcy on Thursday. Johnson, known for her bright, boisterous designs, will not be losing her job but as many as 350 store workers will after the May 8 liquidation, according to the Wall Street Journal.
The Chapter 11 filing by Betsey Johnson LLC will see most of the chain’s 63 stores close, a person familiar with the matter said. Steven Madden Ltd., which owns the Betsey Johnson license, likely will keep four or five flagships in New York City and a few other cities, a source to the WSJ.
The fashion house has been struggling for a few years. In 2010 it restructured itself in an effort to help its finances. It sold a 90% stake in the business to Boston-based private equity firm Castanea Partners and 10% to retailer Steve Madden. However, restructuring wasn’t enough to make the company profitable again. In court papers, Betsey Johnson Chief Financial Officer Jonathan Friedman, blaming the U.S. recession’s effect on “higher-end fashion apparel brands,” said sales at the company’s retail stores have fallen by more than 20% since 2007 and profitability has declined by more than 50%.
Johnson, 69, is know for her eccentric personality (she regularly sports pink hair and cartwheels at the end of runway shows.) Johnson started the label in 1978 and in 2004, the label expanded to sell underwear, handbags, shoes, watches, jewelry, eyewear, swimwear, outerwear and fragrance. She was briefly married to the Velvet Underground’s John Cale in 1968 and was in the same social circles as icons like Edie Sedgwick and Andy Warhol.
Last week, the Style network announced that Johnson and her daughter would star in a new reality series named Betsey + Lulu. This news will definitely provide an interesting plot twist.