FULLBEAUTY Brands, a women’s plus-size direct-to-consumer retailer, won court approval for its restructuring plan less than 24 hours after the company filed for Chapter 11 bankruptcy, according to Bloomberg. FULLBEAUTY will cut approximately $900 million of its $1 billion debt to reduce interest payments and help the company turn itself around.
The deal hands over ownership of the retailer to a group of lenders that includes Oaktree Capital Management, Goldman Sachs & Co. and Clearlake Capital Group. All three lenders will appoint one person to the company’s board, and previous owner Apax Partners will appoint a member as well.
The plan was approved so swiftly because every creditor voted in its favor. Additionally, the company has foreign suppliers that may not be comfortable selling to a retailer that is in bankruptcy, according to Judge Robert Drain, who oversaw the proceedings. FULLBEAUTY was concerned that its suppliers would abandon the company if the case dragged on too long.
FULLBEAUTY launched as a catalogue in 1924, and now does 70% of its business over the Internet. The retailer also sells apparel through Amazon and Walmart. However, these retail giants also are among the company’s chief rivals due to their own plus-sized clothing offerings. FULLBEAUTY also has been hurt by low supplies of basics clothing, heavy discounting and inventory clearance.
The 24-hour bankruptcy breaks the record for the fastest chapter 11 case ever, which had previously been held by Blue Bird Body Co., a yellow school bus manufacturer. Blue Bird spent less than two days in bankruptcy before its reorganization plan was approved in 2006.