Falling retail sales, tough rental terms and damage by looters preceded the filing of Chapter 11 bankruptcy protection by G-Star Raw in the United States.
As G-Star Raw Australia exits the domestic market without a buyer, court documents reveal the brand has not found relief in the Northern Hemisphere.
G-Star CEO Nicole Clayton will pursue restructuring across the US and Sweden after severe disruptions from the pandemic.
In an effort to fight the public health crisis caused by the COVID-19 outbreak and to comply with the mandates imposed by governmental authorities, all US retail stores were closed in March 2020.
Employees were furloughed initially, but as government mandated closures extended, G-Star Raw took steps to manage the cash drain and laid off substantially all of the retail employees.
Adding to the lack of store and wholesale sales, many of stores were subjected to looting during a period of civil unrest in late May and early June.
Looters stole inventory and damaged fixtures, entryways and premises to the point where G-Star Raw needed to commit significant capital to bring them back into operating shape.
The final blow hit as G-Star Raw began to face unprecedented liquidity and operational challenges due to the forced closure of stores in order to comply with guidelines.
Despite attempts to negotiate improved lease terms with landlords, talks were not sufficiently productive to secure adequate rent abatement.
Accordingly, G-Star Raw argued it did not see a viable path outside of a formal restructuring.
It filed Chapter 11 bankruptcy this year, with its Australian business wound up as administrators could not find a buyer.