No one is doing cartwheels at Betsey Johnson, LLC this morning. Most of its 63 retail stores will be closing in coming weeks and roughly 350 employees will lose their jobs after the licensee that operates the retail operation filed for Chapter 11 bankruptcy. Still, the seemingly irrepressible namesake and creative backbone of the enterprise is managing to put a neon front on a dreary backstory.
“Women’s Wear Daily reported the iconic designer, known for her whimsical dresses and zany persona, will remain at the helm of the label,” Helen Kennedy re-reports in the New York Daily News, “focusing on her line of lower-priced clothing that is sold at Macy’s and other mass retailers.”
“I love the moderate price range,” Johnson told WWD. “It is in sync with all the girls who are buying my clothes.”
That is perhaps the motivation behind the relatively upbeat hed in the WWD – “Betsey Johnson Rejigs Strategy” -- which is about all that’s visible in front of the publication’s pay wall.
Formed by Johnson in 1978 with former model Chantal Bacon (who quit as CEO in 2010), the firm is currently owned by private equity firm Castanea Partners and shoe brand Steven Madden following a recapitalization in 2010. “Betsey Johnson -- the person and the brand -- is a perennial favorite for women with a funky fashion sense,” according to a Hoover’s company profile.
"The economic recession had a devastating impact on higher-end fashion apparel brands, including Betsey Johnson Fashions," the company says in its bankruptcy filing,” according to Reuters. Morpheus Capital Advisors was retained in February to help find new investors or to sell the business but it was not able to secure a deal despite talking to 22 potential rescuers.
Madden tells Forbes’s Hannah Elliott in an email that the group will continue to support the Betsey Johnson brand and ensure existing orders will be produced and shipped on time.
“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,” he writes. “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% so far for 2012.”
Shoppers will still be able to find Johnson's designs at department stores such as Bloomingdale's, Saks Fifth Avenue and Nordstrom, report the Wall Street Journal’s Dana Mattioli and Katy Stech.
“The brand operates in the luxury space, with dresses and jewelry easily pricing in the $400 range,’ they write. “While luxury retail has bounced back sharply from the recession, outpacing the rest of the apparel industry, Betsey's retail stores' audience skews younger, which put the chain in competition with lower-priced retailers.”
“This development isn't a huge surprise (the Betsey Johnson brand has wallowed in debt for years), but it's really too bad,” writes Charlotte Cowles in New York’s “The Cut” blog. “Johnson's wacky fashion shows -- which she always concludes with her trademark cartwheel -- are always a highlight at fashion week, and she's a beloved character in the New York fashion industry. Best of luck to her and her employees.”
“Betsey Johnson is one of the most beloved personalities in the fashion industry,” concurs Fashionista blogger Leah Chernikoff. “…She always lands on her feet after those cartwheels and we hope that she -- and her employees -- will now.”
Wonder why we don’t see the same level of sympathy for the likes of “Fast Eddie” Lampert, who has had to shut down a few stores of his own lately. Maybe he ought to practice his gymnastics. We’re talking the endearing physical ones, not the financial kind that he’s applied with great success in other industries. That’s what evidently got him in over his head in the first place.