For fans of the iconic label, news that Betsey Johnson has filed for bankruptcy protection will come as a shock.
According to Vogue UK, Betsey Johnson has filed for protection under the Chapter 11 US Bankruptcy Code, and while she will remain creative director of the brand, 63 stores will shut its doors and 350 employees will be let go.
The Betsey Johnson label will reportedly focus on her lower-priced line, but will still stage a runway show in September for Fashion Week. Obviously, the announcement has hit Betsey hard.
“I feel so sad for my store people and my pink girls,” she told WWD. “They live and die for me. But I need to be better. I really need to work well and be more efficient.”
Whether it’s inefficiency or lack of hard work, the company’s chief financial officer, Jonathan Friedman, has said that the latest development is the result of limited cash flow.
“The decision to seek protection under Chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash-flow problems,” he said. “After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming.”
Here’s hoping Betsey Johnson can withstand this latest shake-up.