Hampshire Group is calling it quits on its business operations.
The fashion apparel provider, whose brands include Dockers and James Campbell, and two of its U.S. subsidiaries, filed voluntary petitions under Chapter 11 in the U.S. Bankruptcy Court on Friday.
Hampshire Group failed to find a financing source to fund its turnaround initiatives and the Board of Directors determined that an orderly liquidation would be best for the company’s creditors and stakeholders. Litigation efforts of an unsecured creditor also contributed to Hampshire Group’s downfall this summer and prompted the company to file for Chapter 11.
“While we are disappointed with this outcome, the prospect of the Company being unable to continue to effectuate a controlled wind-down of its licensed businesses out-of-court were severely and negatively jeopardized by the actions taken by a single unsecured creditor,” Hampshire Group said in a statement.
Salus Capital Partners LLC, the company’s senior secured creditor, provided a commitment to allow Hampshire Group to utilize cash collateral throughout the Chapter 11 process.
Hampshire Group’s Chapter 11 filing follows the company’s latest financial troubles. In June, Hampshire Group considered ceasing its business operations after the company failed to secure a new credit facility to repay its debt. After considering closure, Hampshire Group reached an agreement with its primary licensor, Levi Strauss & Co. in July to preserve Dockers’ clothing production, product development, product processes and sourcing affiliations. Last year, the company also sold its Honduras-based Rio Garment business for $6 million to pay off funds owned to its lender.