Liberated Brands, which until recently operated skateboard and surfing-inspired retail brands including Quiksilver, Billabong and Volcom, has filed bankruptcy as more customers choose âfast fashionâ competitors.
Liberated sought court protection in Delaware Sunday, saying it intends to close its stores as part of a wind-down of its North American operations. The company, which had operated the brands under a deal with brand licenser Authentic Brands Group LLC, said it will also seek to sell its international businesses and has closed its corporate offices and laid off nearly 1,400 employees.
The bankruptcy filing caps a rapid rise and sudden fall of a business that was founded in 2019 after Volcomâs management team sold that brand to Authentic, which has acquired several several retail brands through Chapter 11. Liberated listed more than $100 million in liabilities on its Chapter 11 petition and has lined up a $35 million loan to fund the bankruptcy.
Liberatedâs revenue increased from $350 million in 2021 to $422 million in 2022, a jump the company attributed to a sharp increase in demand during the Covid-19 pandemic and acquisition of more brand licenses. About half of the companyâs income came through retail sales on brand websites and physical stores and selling apparel wholesale to other retailers, according to court documents.
The business expanded in 2023 when Liberated started running several more Authentic-acquired apparel brands, including Billabong, Quiksilver, Roxy, and RVCA. But Liberated CEO Todd Hymel said in a court filing that the companyâs fortunes changed as the effects of the pandemic abated and interest rates began to rise, resulting in lower demand for its offerings.
Company management believed the trend would diminish last year but in the past 18 months âthe average consumer has shifted their spending away from discretionary products such as those offered by Liberated,â Hymel said. The business was also hurt by a shift to large âfast-fashionâ retailers that can sell garments at lower prices and capitalise on so-called micro-trends as opposed to the traditional seasonal retail model, he said.
âConsumers can cheaply, quickly, and easily order low-quality clothing garments from fast fashion powerhouses and have such goods delivered within days,â he said.
Authentic in December terminated Liberatedâs North America license for the wholesale businesses of Volcom, RVCA and Billabong after the company failed to make a royalty payment, according to court documents. The license rights to those brands were subsequently transitioned to new operators, Hymel said.
The case is Liberated Brands LLC, number 25-10168, in the US Bankruptcy Court for the District of Delaware.
By Jonathan Randles
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Kering to Sell Volcom
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