The U.S. division of retailer L’Occitane has filed for Chapter 11 bankruptcy in New Jersey. The company said the move is part of its plan to implement a “store footprint optimization plan, including the contemplated exit of unprofitable locations.”
“L’Occitane en Provence boutiques across the country are open and operating safely in accordance with all applicable COVID-related guidelines,” the company said on Tuesday (Jan. 26) in a press release. “The company has ample liquidity to support ongoing operations across all channels and fulfill commitments to its valued employees, customers and suppliers.” The company will honor outstanding gift cards.
The beauty retailer said the bankruptcy process will “further accelerate (its) U.S. lease portfolio restructuring initiative.” L’Occitane said the case does not include its France-based parent company or any other of its subsidiaries.
According to Blooomberg Law, the chain’s U.S. revenues plunged 56.5 percent between April and December compared to the previous year, as the pandemic slammed brick-and-mortar retailers. L’Occitane, which employs more than 1,000 people in the country, filed for bankruptcy after failing to reach agreements on its leases.
“Today’s action is a pivotal step forward in achieving the full potential of L’Occitane’s U.S. business,” said Yann Tanini, managing director of L’Occitane North America, in the news release. “We look forward to working collaboratively with our landlords to achieve partnerships that make economic sense in this current retail environment.”
According to the release, “the company has filed with the court a series of customary motions seeking to continue operating its business as usual.” These include “requests to continue to pay wages and provide benefits to employees … and maintain customer policies. The company intends to continue to pay suppliers in the ordinary course for all goods received and services rendered.”
In 2019, L’Occitane was riding high. The luxury cosmetics company was negotiating a deal to buy British beauty and skincare brand Elemis. At the time, L’Occitane said the acquisition of the Elemis brand — which is popular with millennials and Generation X consumers — was intended to strengthen its global growth.