The Collected Group's Chapter 11 cut $150 million of debt and ended its stores

What was changed

The Collected Group, owner of contemporary fashion brands Joie, Equipment and Current/Elliott, filed for Chapter 11 in April 2021 with a pre-packaged plan: equity to its secured lenders, secured debt cut to $30 million from more than $185 million, and a full wind-down of its brick-and-mortar stores to concentrate on e-commerce and wholesale. At its largest the company ran 33 branded stores, according to its chief restructuring officer.

The trouble predated the pandemic. In 2018 a new business management system 'went live without critical warehouse and logistics functionality', in restructuring officer Evan Hengel's words, disrupting shipping and distribution for nine months and hurting revenue, cash flow and department-store relationships. An out-of-court restructuring followed: lender KKR converted some debt into equity and took ownership from private equity firm TA Associates.

A late-2019 process to sell the company drew interested buyers, but COVID-19 ended it as buyers backed off or lowered prices. In 2020 retail revenue fell 85% and wholesale 70%, while e-commerce grew 37% to $27.8 million and reached about half of total revenue. Landlord talks for variable rent produced only a few agreements, reopened stores underperformed, and default notices piled up: brick-and-mortar, Hengel said in court documents, was 'no longer viable'.

Lenders took control through the reorganization, which let the company shed $150 million in secured debt, and existing lender KKR provided new debt capital for growth centered on digital and wholesale. The company completed the restructuring and emerged from bankruptcy on May 26, 2021, according to an emailed statement.

Why it worked

E-commerce was the only growing channel in 2020 — up 37% to $27.8 million, about half of revenue — while stores were closed or underperforming.

Landlord negotiations mostly failed: only a few variable-rent deals were reached, and reopened stores underperformed on weak foot traffic.

A pre-packaged plan let the secured lenders who already dominated the capital structure reset the balance sheet within weeks rather than years.

The 2018 systems rollout that broke shipping for nine months had already pushed the company into KKR ownership and a wholesale-and-digital rethink.

What can be applied

Pivot to the channel already carrying you: e-commerce hit half of revenue in 2020, so closing stores shrank the cost base without abandoning the customer.

Aftermath

The group emerged from bankruptcy on May 26, 2021, with its lenders in control and KKR providing new debt capital aimed at the digital and wholesale businesses after winding down the physical footprint. The brands' court-filed celebrity resume — Jennifer Aniston, Meghan Markle, Kate Middleton — had not saved the stores; Joie, at 55% of sales, carried the case for keeping the brands alive without them.