Diesel USA Files for Bankruptcy Protection
Diesel Spa’s American arm filed for Chapter 11 bankruptcy protection on Tuesday.
The Denim maker and retailer blamed high overhead costs at some of its stores, cyber fraud and a failed strategy by the prior management team.
According to the petition filed with the US Bankruptcy Court in Delaware, Diesel USA who has been the sole distributor of Diesel products in the United States since its 1995 launch said that it does not intend to close, but to eliminate some of its 28 stores and transfer some of them to smaller, more convenient spaces.
‘Since its creation in 1978, Diesel has experienced extraordinary growth and has evolved from being a leading pioneer in denim into the world of premium casual wear, becoming a true alternative to the established luxury market,’ Mark G. Samson, chief restructuring officer of Diesel USA Inc., said in the court filing.
The company’s three-year business plan to return to its pre-recession profitability contemplates focusing on more profitable stores, improving its product lines, a new marketing initiative to relaunch its position as a ‘5 Pocket’ market leader, and working with social media influencers to attract Millennials, Generation Z and other new customers. The US division also has a new management team in place that includes Stefano Rosso (son of Renzo Rosso, Diesel’s founder) as chief executive officer since June 2017.
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