Hampshire Group released a major update on its financial situation.
The fashion apparel provider on Monday announced that it reached an agreement with its primary licensor, Levi Strauss & Co., and its senior secure lender in regards to Dockers brand clothing production. Under this agreement, Hampshire Group will transition Dockers licenses back to Levi Strauss & Co. in addition to other product development, product processes and sourcing affiliations.
Hampshire Group will also liquidate all of its receivables and assets to pay off outstanding debts with Levi Strauss & Co. The lender said it will financially support Hampshire Group’s identified purchase orders completion. Due to the major transition, Hampshire Group revealed that it might enter into another agreement with Levi Strauss & Co. to fund other company operations. All turnover is expected to end in early October.
Hampshire Group’s financial decision coincides with the company’s recent business forecast. Last month, the group debated ceasing operations after the company failed to secure a new credit facility from its lender. Hampshire Group was unable to meet its legal obligation of debt repayment and its lender said that it wouldn’t renew existing loans. Last year was also a difficult time for Hampshire Group. The company sold its Rio Garment business in Honduras for $6 million, in order to pay off funds owed to its lender.
The company has not made any decisions about its other brand, James Campbell. Management will continue issuing updates about James Campbell throughout the company’s financial transition.