Quiksilver, Inc., the surfwear retail chain that is parent company to Roxy and DC Shoes, filed for Chapter 11 Bankruptcy earlier today in the Bankruptcy Court for the District of Delaware.
Founded in 1969, Quiksilver sells gear like wetsuits and helmets, along with clothing aimed at mountain and ocean lovers. Quiksilver rode the fashion trend toward surfer and skateboarding styles in the 1990s and early 2000s, along with names like Billabong and Pacific Sunwear of California Inc. The company, which teamed up with high profile sponsored athletes such as surfer Kelly Slater and skater Tony Hawk, sponsored surfing competitions around the world. But a shift away from surfer fashion, along with broader pressures on the apparel industry, took their toll. After a period of heady expansion, Quiksilver struggled to compete with fast-fashion retailers like H&M and Abercrombie & Fitch. Those brands lured away Quiksilver’s teen customers with lower prices and on-trend clothes, and the company lost its cachet with athletes. In recent years, Quiksilver has suffered falling sales and profits, leading to the company’s stock losing 79% of its value this year. According to the bankruptcy filing, Quiksilver listed assets of more than $100 million and liabilities of more than $500 million.
As part of a prearranged Chapter 11 restructuring, Quiksilver is now hoping to receive court approval for a deal that would allow the retail chain to receive $175 million, as debtor-in-possession financing from Oaktree Capital Management, LP, which would allow the company to operate through the restructuring process. At the end of that process, Oaktree will exchange its debt claim for a majority stake in a reorganized Quiksilver. Currently the company has about 700 locations, with more than half its sales coming from outside the U.S. The company plans to continue normal operations of its foreign subsidiaries, which are located in the European and Asia-Pacific regions, since they were not a part of this bankruptcy filing and remain unaffected by it.