The Dallas-based company laid off some staff last month and is expected to exit Chapter 11 with a new owner. The company has assets of up to $10 million, but owes more than that to creditors. Its largest creditor is Hong Kong-based TAL Group, which is owed nearly $6.6 million. Under the pre-packaged plan, a TAL subsidiary agreed to fund the bankruptcy, and presuming the bankruptcy court approves the reorganization plan and disclosure statement, TAL would become the 100 percent equity owner of Hilburn upon its exit from Chapter 11.
Founded in 2007 by Hil Davis and Veeral Rathod, the premise of Hilburn’s business model was to re-engineer men’s wear with custom-made clothes that fit, making it among the first in the direct-to-consumer channel to focus on a tailored collection for men. The two are no longer involved in the business.
Hilburn relies on an innovative supply chain that works with more than 11 mills and 10 factories to source fabrics and deliver a custom-made wardrobe in four weeks or less. Early on Hilburn touted a sustainable supply chain that included fair labor standards and a respect for the environment. Mill partners include Italian firms Trabaldo Togna, Reda, and Barberis.
Given it’s custom offering, Hilburn prices aren’t cheap. A Reda merino wool suit is offered at $998, with the sportcoat available separately for $750 and trousers at $248. Shirts run between $178 and $188, while a knit polo made of interlock jersey is $138.
Hilburn survived the 2008 Great Recession as a startup, and is still owned by a group of investors, many among the venture capital community. The VC group include Battery Ventures, Baseline Commerce Seed Fund and Bridgescale Partners. Their equity stake will be canceled once TAL becomes the new owner upon Hilburn’s emergence from bankruptcy proceedings.
The company operates a Dallas Studio where customers can browse the current collection or work with personal stylists, in addition to showrooms in Boston, New York City, and Bellevue, Wash., all of which are temporarily closed due to the coronavirus pandemic. The Hilburn website says stylists are available to assist by phone or video for virtual appointments. The stylists work on commission, have their own client base and operate as an independent small businesses.
Hilburn is best known for tailored formal wear, custom suits and shirts. In recent years, it began adding more casual apparel, but still seemed to rely on its tailored collection business. A recent blog post from April 1 detailed its summer linen suiting, while a March 25 post offered timely inspiration for work-from-home looks. The post discussed the “need to look professional and well,” pointing out comfortable easy-to-wear fabrics for shirts, along with lightweight knit jackets for the virtual sales call or meeting. It also noted Hilburn’s more casual offerings, such as polos, chinos and even shorts.
Hilburn’s filing comes in the first wave of fashion firms collapsing under liquidity crises exacerbated by the revenue-killing COVID-19 outbreak, which has claimed True Religion, J. Crew and, across the pond, Laura Ashley and Debenhams, as its victims.