Centric Brands, a brand licensing group based in New York City, is on track to emerge from bankruptcy by the end of October. After filing for Chapter 11 bankruptcy in May, the company has received approval for its reorganization plan from the United States Bankruptcy Court. The plan involves Centric becoming a privately owned company by its current lenders, including Blackstone, Ares Management, and HPS Investment Partners.

Centric Brands owns a diverse portfolio of brands, including Zac Posen, Hudson, Robert Graham, Swims, and Avirex. Additionally, the company holds numerous licenses for well-known brands such as Calvin Klein, Tommy Hilfiger, Under Armour, Kate Spade, Hervé Léger, and Michael Kors. As part of the reorganization, Centric aims to significantly reduce its second lien debt to create a solid foundation for future growth.

Under the plan, Blackstone will exchange its second lien debt for equity interests in the restructured Centric, while Ares and HPS will retain their senior loan positions and receive equity interests as well. The company also intends to secure new exit financing through a securitization facility and obtain new revolving and term loan facilities from its existing secured lenders.

Centric Brands CEO Jason Rabin expressed gratitude towards the employees for their hard work during the bankruptcy process and the challenges posed by the COVID-19 pandemic. He also acknowledged the support of brand licensors, retailers, sourcing network, and lenders, which played a vital role in reaching this pivotal moment.

The COVID-19 pandemic has significantly affected various companies, leading to an increase in bankruptcy filings. Centric now joins the ranks of Neiman Marcus Group, J.C. Penney Co., and J. Crew Group, who also filed for Chapter 11 bankruptcy due to the impact of the pandemic. Furthermore, prior to the pandemic, Centric already had a substantial debt load, entering bankruptcy with approximately $1.7 billion in funded debt.

Despite the hurdles, Centric remains optimistic about its future. With a strengthened financial position, the company’s CEO looks forward to a prosperous future ahead. The reorganization plan and Centric’s emergence from bankruptcy represent a critical milestone in its journey towards becoming an even stronger company, poised for long-term growth.

For more information on Centric Brands, please visit their official website here.

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