BCBG Buys Bankrupt New York Retailer
BCBG Max Azria Group, Inc. and Guggenheim Corporate Funding LLC bought bankrupt G+G Retail Inc. for $35 million.
G+G, a New York-based chain of 566 stores for juniors operating under the G+G and Rave nameplates, filed for Chapter 11 bankruptcy protection last month.
In a U.S. Bankruptcy Court auction in New York, BCBG on Feb. 15 outbid several other companies, including Wet Seal Inc. of Foothill Ranch, Calif. Wet Seal bid $15.2 million for G+G. The bid was Wet Seal’s first attempt to acquire another property after emerging from bankruptcy problems of its own more than one year ago.
BCBG and Guggenheim formed a holding company called Max Rave LLC to handle G+G’s assets. BCBG anticipated that Max Rave will be merged into BCBG at the end of 2006. A BCBG spokesman would not comment further on the fashion company’s plans for its new acquisition.
The sale left the fashion and retail communities wondering where BCBG would take G+G. Does the sale mean that BCBG, a contemporary fashion company, would use the purchase of a juniors store chain to build a juniors division? Would it mean that BCBG would convert G+G into a chain of contemporary boutiques?
Ilse Metchek, the executive director of Los Angeles-based California Fashion Association, forecast that BCBG would use G+G assets to build a chain of contemporary stores. “To start (a chain) from scratch would be a herculean task,” she said.
—Andrew Asch
