This post originally appeared on the Council of Fashion Designers of America website, CFDA.com.
Before the COVID-19 outbreak, fashion retail already faced difficult times with numerous bankruptcies, such as Barneys, Sonia Rykiel, Roberto Cavalli and Diesel. Now with COVID-19, fashion retail confronts a “perfect storm” — the hurricane of the disruption of brick and mortar retail caused by omnichannel retailing and the Nor’easter resulting from the shutdown of all retail stores and lockdown of consumers in the US. It is anticipated that retail bankruptcy filings will proliferate in the wake of COVID-19 and, as a result, it is important to have a basic understanding of the bankruptcy process and concepts for fashion businesses, including Chapters 11 and 7, critical vendor status, how to file a claim, and what strategies can be used to sell to an entity once it has filed for bankruptcy. Continue Reading