Frederick’s of Hollywood Files for Chapter 11
LOS ANGELES — Frederick's of Hollywood Group Inc., which announced last week that it closed all of its brick-and-mortar retail locations, filed for bankruptcy protection on Sunday.
The sexy lingerie retailer will continue online sales throughout the Chapter 11 bankruptcy, which is designed to hand over the operation into new hands.
Authentic Brands Group LLC, which has purchased numerous companies through bankruptcy sales, has made a $22.5 million offer for Frederick's of Hollywood’s assets and intellectual property.
Authentic Brands also would provide its current ownership, Harbinger Group Inc., 25 percent of future brand revenue, according to court filings.
It would continue the company as an ongoing entity as an online retailer.
If any competing bids are received, Frederick's of Hollywood is planning a May 28 auction, with Authentic Brands as the leading bidder.
The Chapter 11 filing lists total assets of $36.5 million and total liabilities of $106 million. It is carrying $33 million in secured debt load and $16.2 million in unsecured promissory notes. Trade debts and landlord liabilities are $56.7 million.
The largest unsecured claims for trade include creditors Longray Intimates LLC, which is owed $2.36 million; Montelle, $1.3 million; National Corset, $575,000; and Ascension Lingerie & Swimsuit LLC, $412,000.
Last week, Frederick’s of Hollywood, in a message on its website, said that it no longer has store locations.
For the Los Angeles-based company, it’s the second time through bankruptcy. Frederick's of Hollywood declared Chapter 11 in 2000, emerging from bankruptcy in 2003 and later going public in 2006.
Frederick's of Hollywood was once the Victoria's Secret of its time. But that was long ago. Through the years, the company has mixed up its offerings to boost revenue, even by selling sex toys, although even that idea was eventually dumped.
Authentic Brands, the lead bidder for Frederick's of Hollywood’s assets and intellectual property, operates and licenses such brands as Prince, Viking, Ektelon, Airwalk, Adrienne Vittadini, Sansabelt, Juicy Couture and Above the Rim, among many others.