Los Angeles-based Denim of Virtue is out of business due to deep debt.
The niche denim label filed for Chapter 7 bankruptcy protection last week, seeking a liquidation of its assets. WWD reported that in the filing, the company showed it was operating on slim margins and overwhelmed by debt. Denim of Virtue listed assets of just under $100,000 while liabilities were listed as nearly $1.7 million. The brand was no longer sold through any wholesale partners.
Denim of Virtue was founded in 2006. The 2019 collection called “The Virtue of Nature” featured a range of adaptable and multifunction denim garments with natural wash treatments. The brand also dabbled in some sportswear pieces like T-shirts and tie-dye sweatshirts with minimal logo designs.
The retail crisis caused by the pandemic has forced fashion brands with existing financial woes to enter into bankruptcy.
In April, True Religion filed for Chapter 11 bankruptcy court protection, brought on by stores forced to close due to the coronavirus pandemic. Centric Brands filed for Chapter 11 in May. The company’s brand portfolio spans denim labels like Hudson Jeans and Joe’s Jeans.
Many companies overseas are succumbing to insolvency, too. AllSaints, which operates more than 250 stores globally, is seeking steep rent cuts from landlords via a company voluntary arrangement (CVA), which is a formal insolvency procedure designed for a business to settle debts by paying only a portion of the amount owed to creditors.
And in May, G-Star Raw made an unexpected move for its Australia business. The Dutch denim brand has entered into voluntary administration in Australia, despite reportedly not carrying any major debt.