La Senza could be facing the music after three suppliers filed an involuntary bankruptcy court petition to force the Canadian intimates retailer into a Chapter 7 liquidation proceeding.
The largest of the three vendors is MGF Sourcing US, LLC, owned by private equity firm Sycamore Partners and joined by Ocean Lanka (Pvt) Ltd. and Teejay Lanka Plc. The petition charges that La Senza is past due on payment for about $41.7 million of goods already shipped. The trio submitted the involuntary filing in a bankruptcy court in Delaware Monday. MGF also filed separately in Toronto the same day, seeking to have La Senza’s Canadian operations declared bankrupt.
While no hearing date has been set in either court, La Senza has about 20 days to submit a response as to why it should not be hauled into bankruptcy court.
Both MGF and La Senza have a connection to L Brands.
L Brands, formerly The Limited and the parent company of Victoria’s Secret and Bath & Body Works, acquired apparel sourcing arm Mast Global Fashions in 1978 and sold a 51 percent stake to Sycamore in 2011. Sycamore renamed the group MGF Sourcing 9 in 2012 following a transition period. The private equity firm purchased the remaining interest in MGF in 2015 from L Brands, which sold its interest in La Senza to private equity outfit Regent LP in December 2018.
The Chapter 7 filing included an affidavit from Daniel Bloch, MGF’s vice president of finance. The sale of La Senza included separate agreements in which MGF would source goods for La Senza, and L Brands would guarantee up to $20 million of La Senza orders, he said.
La Senza owns and operates more than 100 stores in the U.S. and Canada, in addition to hundreds of international franchise locations from Cape Town and Riyadh to Kuala Lumpur. The retailer’s cheeky wares and frilly frippery skew toward young millennial women.
Executives at L Brands nor Regent did not respond to requests for comment by press time.