Sequential Brands Group Inc., the company that owns and licenses consumer brands from Jessica Simpson fashions to Gaiam yoga wear and Joe’s Jeans, has filed for bankruptcy and will sell assets, saying that a big debt load and the COVID-19 pandemic made business. The business sought chapter 11 protection Tuesday in the U.S. Bankruptcy Court in Wilmington, Delaware. The company said that it enters bankruptcy with a restructuring agreement with its lenders and has lined up $150 million in financing, of which $141 million will be available immediately pending court approval, to stay afloat through the chapter 11 process.
Sequential’s two biggest shareholders are Martha Stewart and private-equity firm Tengram Capital Partners, which own 10.9% and 11.5%, respectively. Sequential has been in trouble with the U.S. Securities and Exchange Commission since last year, when the regulator sued the company, alleging shortcomings in its accounting. In February, Sequential filed a motion to dismiss the complaint, which remains pending. In early August, the SEC settled charges against Sequential’s former CFO, Gary Klein. Revenues started declining in 2019 and continued declining during the pandemic, according to a court filing by current CFO Lorraine DiSanto. The impact of COVID-19 also caused supply-chain disruptions for retail licensees, she said in a court filing.
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