In light of the recent COVID related wave of bankruptcies affecting fashion brands such as John Varvatos and True Religion, the article explores the trends and implications since the one-year anniversary of ‘Mission Product Holdings v. Tempnology.’
It is no secret that the fashion industry has been steering against a headwind of challenges. Beginning with the rise of e-commerce and the layering on of significant amounts of debt, the current global pandemic might be said to have simultaneously exacerbated these vulnerabilities while also posing new obstacles, such as unforeseen inventory, vendor and supply chain issues.
In the span of five months, apparel companies such as True Religion, John Varvatos, Lucky Brands, and Brooks Brothers have filed Chapter 11 cases, some hoping to reorganize but, more often than not, ultimately pursuing strategic sales of their assets or opting for wholesale liquidations.
These unprecedented challenges are not without opportunities for acquirers and investors as well as licensees of brands. Notably, the wave of bankruptcies also coincides with the one-year anniversary of the Supreme Court’s decision Mission Product Holdings, Inc. v. Tempnology, LLC, a ruling that has a direct impact on the rights of a trademark licensee following the bankruptcy of a debtor-licensor.