Apparel retailer Nine West Holdings and its creditors are close to finishing a deal to restructure more than $1 billion of debt, which includes filing for bankruptcy and divesting parts of the business, Bloomberg reported Wednesday, based on conversations with people familiar with those talks. This strategy would include asset sales to pay off creditors, where Nine West would seek Chapter 11 court protection and ultimately file for bankruptcy before a March 15 interest payment, the sources told Bloomberg. Representatives from Nine West and its private equity owner, Sycamore Partners, declined to comment.
Total Retail's Take: Nine West is in a familiar situation for a lot of retail apparel brands — debt is mounting as the company tries to find its way in an increasingly crowded space. The growth of fast-fashion brands such as H&M (recent scandal not withstanding) and Zara have increased the pressure on Nine West to diversify its business to meet changing consumer demands, including the ability to source product quickly and cost effectively. A Chapter 11 bankruptcy filing would give Nine West more time to repay creditors as well as make changes to its business model (notably its supply chain) to better compete in today's fast-fashion environment.