Legendary fashion designer Betsey Johnson, who’s known for her bold and flirty selection of evening and day dresses plus apparel, handbags, shoes, jewelry, watches, swimwear and lingerie, has filed Chapter 11. The vibrant 69-year-old’s licensing company filed for bankruptcy protection and the move will reportedly result in the closure of the majority of its stores.
“After rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash flow problems,” the 34-year-old company wrote in an official statement, “[and] 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.”
As a result of an estimated $4.1 million debt, nearly 350 employees will lose their jobs when 63 Betsey Johnson stores close between May and July. Despite the turmoil, Johnson will continue to design sportswear, as well as focus on the lower-priced Betsey Johnson currently available at Macy’s. “I love the moderate price range,” Betsey said. “It is in sync with all the girls who are buying my clothes.”
Steve Madden, owner of Betsey Johnson’s intellectual property rights since rescuing Johnson in 2010, is looking at things on the bright side. “While this particular licensee may be closing, the Betsey Johnson brand is stronger than ever, with a thriving wholesale business across a range of product categories,” Madden said. “As the owners of the Betsey Johnson brand, we at Steve Madden remain firmly committed to Betsey Johnson — the designer, her vision, and our growing wholesale business — which is up over 50 percent so far for 2012.”
Johnson has been staging runway shows for years, next up for the iconic American fashion designer is to take part in a different kind of show — a reality show titled “Betsey + Lulu” on Style Network. It will star Mama Johnson, her daughter, Lulu Johnson, and Lulu’s two daughters. The foursome lives together in a co-op on the Upper East Side, and the antics arise while cameras are taping.