Another major retailer has fallen victim to the shifting tides of the fashion industry. Liberated Brands, the operator of well-known labels like Roxy, Quiksilver, Billabong, and RVCA in the United States and Canada, has filed for bankruptcy and will close 120 stores.
Just a few years ago, the company was thriving. Liberated Brands experienced a significant boost during the COVID-19 pandemic, with its revenue surging from $350 million in 2021 to $422 million just one year later. It also expanded from operating 67 stores to 140 locations while much of the world was in lockdown.
Now, the company has collapsed and may shut down its North American operations entirely. So, what went wrong? Read on to discover the key factors behind its dramatic financial downturn.
Liberated Brands files for Chapter 11 bankruptcy
Liberated Brands has officially filed for Chapter 11 bankruptcy in Delaware. As part of the bankruptcy proceedings, the company has launched clearance sales, offering remaining stock at discounts of up to 60%. In addition to shutting down 120 stores, Liberated Brands is also seeking to close its international operations, shut down corporate offices, and lay off nearly 1,400 employees.
Court filings reveal that the company holds more than $100 million in liabilities. However, it has secured a $35 million loan from JPMorgan Chase to navigate the bankruptcy process.
While the fate of Liberated’s U.S. operations is now clear, uncertainty remains regarding its presence in other regions. Australia, for example, has 18 Billabong stores and 13 Quiksilver locations that also carry Roxy merchandise. It is yet to be determined whether the U.S. bankruptcy will impact these outlets.
What led to Liberated Brands’ Bankruptcy filing?
Liberated Brands CEO Todd Hymel cited rising U.S. interest rates and shifting consumer preferences as key factors behind the company’s financial struggles. In his court filing, he highlighted the growing dominance of fast-fashion giants like Shein and Temu.
“The average consumer has shifted their spending away from discretionary products such as those offered by Liberated,” Hymel stated. “Consumers can cheaply, quickly, and easily order low-quality clothing garments from fast fashion powerhouses and have such goods delivered within days.”
In December 2024, financial pressures forced Liberated Brands to surrender its North American licenses for Billabong and RVCA after missing a royalty payment.
It’s worth noting that while Liberated Brands’ retail stores are closing, the individual brands themselves will remain in the market. Authentic Brands Group, which owns these brands, has partnered with new licensees for their distribution in North America.
According to Shop-Eat-Surf-Outdoor.com, some of the new licensees include:
- O5 Apparel: previously held the Quiksilver license, now added Billabong to its list of brands;
- The Levy Group: previously managed the Roxy swim and outerwear licenses, now added Volcom to its portfolio; and
- Quetico Lifestyle Brands: launched an offshoot called Ethos Brands, the new RVCA licensee.