On Wednesday, True Religion Brand Jeans filed for Chapter 11 bankruptcy protection, becoming another casualty of the massive hit against retail.
True Religion CEO and president John Ermatinger released a statement about the bankruptcy filing, saying, “After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success.”
While the online storm shaking up all of retail is partly to blame for True Religion’s filing for Chapter 11 bankruptcy this week, it also may be because the brand stayed too true to its roots in the cult of denim.
Over the past few years, athletic wear has turned into everyday wear, and clothing brands that have ignored the consumer shift to stretchy pants have suffered.
“Athleisure is a consumer born trend,” says Marshal Cohen, chief industry analyst at The NPD Group. “Consumers decided they wanted to dress that way. Americans decided we want to look athletic. Even if we don’t do yoga, we want to look like we do.”
Instead of adding stretch fabrics like other denim distributors ranging from Levi’s to Stella McCartney, True Religion stuck with their jeans and T-shirt combination. The brand’s signature large stitching and flashy logos plastered on t-shirts are woefully out of style to many younger shoppers, but unfortunately still in stores.
“Most of the designers have gone into casualization,” says Jane Hali, CEO of Jane Hali & Associates. “True Religion really didn’t keep up with the cool factor. Premium denim has to keep their cool factor through collaboration and through influencers.”
Younger generations aren’t as interested in shelling out big bucks for luxury fashion. Millennials, in particular, aren’t enchanted with True Religion. The fifteen-year-old denim company has a mere 270,000 followers on Instagram, compared to Stella McCartney’s 4.2 million and Levi’s 2.4 million.
“You can equate it to the sneaker market. Jimmy Choo, Louboutin, Dior. Everyone in luxury shoes is going into sneakers. Because it’s the casualization of luxury,” Hali explains. “The luxury denim market was hit first by other designers coming out with the casual trend.”
As bankruptcies go, True Religion still has a fighting chance as it seeks to reorganize under court protection. Citzens Banks has financed True Religion for up to $60 million in post-petition debtor-in-possession and the company only plans to close 27 out of its 140 stores. The company said that it will be able cut its debt by 75%, or $350 million, if the court approves its plan. But in order to make a significant change, True Religion will have listen to the kids.
