US denim retailer True Religion has filed for bankruptcy protection. It has signed a restructuring agreement with a majority of its lenders. The restructuring agreement will slash the company’s debt by over $350 million. The restructuring plan provides full payment of claims of True Religion's continuing trade creditors, which includes continuing vendors, suppliers and landlords.
True Religion’s financial struggles are due in part to consumer tastes shifting toward online shopping and away from the brick-and-mortar shops and department stores where the company's jeans have been primarily sold.
The company would continue to operate business as usual. It sells its jeans and other clothing in 140 stores with the True Religion and Last Stitch brand names, and through other boutiques and department stores. The company closed 20 of its stores last year to cut costs.
Founded in 2002, True Religion grew popular with its array of pricey designer jeans, and from 2007 through 2012, it nearly tripled in size. True Religion’s problems were further adversely impacted by new product designs launched by the company that failed to resonate with the consumer. The rise of fast fashion stores carrying lower prices has hobbled True Religion and other apparel retailers.