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Premium Denim Retailer True Religion Has Filed for Bankruptcy

On Wednesday, True Religion Apparel, a premium denim designer that soared in popularity in the late 2000s, announced it has filed for bankruptcy protection, signing a restructuring agreement with many of its lenders.

True Religion filed for creditor protection under Chapter 11 in the U.S. bankruptcy court in the District of Delaware; the retailer listed assets and liabilities in the range of $100 million to $500 million. In a court filing, True Religion said it hopes it stay in business, but does plan on closing some store locations.

Under the restructuring deal with lenders, TowerBrook Capital Partners—which is the New York provate equity firm that owns the jeans retailer—will slash True Religion’s debt by $350 million, or about 75%. TowerBrook, which also owns J. Jill JILL, Kaporal Jeans, and the NHL’s St. Louis Blues, will still retain a minority stake.

The plan also provides for full payment of claims of True Religion’s continuing trade creditors, including landlords, suppliers, and vendors. The company expects the reorganization to take 90 to 120 days.

“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success,” John Ermatinger, the company’s president and CEO, said in a statement.

True Religion was founded back in 2002, and is based outside of Los Angeles. With more than 140 stores in 33 states and foreign markets, the denim retailer also sells its product in department stores like Nordstrom JWN, Saks Fifth Avenue, and Bloomingdales, which is owned by Macy’s M.

True Religion said its business had been hurt by discounts at other retailers, a common foe in the industry, as well as online competition and interestingly, the athleisure trend. Consumer tastes have also been shifting, moving away from the “trendy” denim that True Religion is known for and moving towards more classic, versatile denim styles.

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