The American denim brand True Religion Jeans was founded in 2002 by Jeff Lubell and Kym Gold. The pair based their brand image as one of quality and class referring to it as ‘premium denim’ that is handmade in America. The jeans are marketed to a higher-end consumer ranging between $174 and $363 per pair. The variety of styles and lifetime warrantee that guarantees a replacement pair if a malfunction occurs is an appeal to many consumers. In 14 years True Religion has opened roughly 900 boutiques and specialty stores across 50 countries in 6 continents.
Recently, the brand has been faced with a hardship financially which has caused them to turn to the law firm Kirkland & Ellis LLP to investigate multiple debt restructuring options. A shift in consumer’s taste causing an increase in online shopping and a decrease of department stores and boutiques where the brands jeans are primarily sold. The athleisure trend that has caused a surge in the popularity of comfortable athletic based clothes has also had a blow on True Religions sales. Thus causing the struggling company to cope with a $400 million debt pile up.
True religion has begun consulting with Kirkland to explore possibilities for slashing its debit, such as through a bankruptcy filing, or negotiating with the company’s leaders. A main factor that shows True Religion poor finical standing is the $400 million term loan that was traded at roughly 27 cents on Tuesday October 11. The low quote of the loan, also being used to finance TowerBrook’s purchase of True Religion in 2013 for $824 million.
What I don’t seem to understand is why doesn’t True Religion embrace society’s new trends?
Multiple clothing companies such as Forever 21, H&M, and GAP have all jumped into the athleisure trend by branching out from their original brand image and creating a section made for a combination of athletic and leisure wear. Similar to the idea of the athleisure trend multiple denim companies have begun to embrace the idea of jegging or joga jeans. What True Religion must come to realize is that in order to continuously succeed in today’s fashion world one’s company must be flexible and be able to respond rapidly to the markets changes.
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References
http://www.reuters.com/article/us-truereligion-restructuring-idUSKCN12C24P
http://www.truereligion.com/company-about.html
https://www.leaf.tv/articles/history-of-true-religion-jeans/
http://rivetandjeans.com/true-religion-might-dire-financial-issues-cs/
https://hbr.org/1996/11/what-is-strategy
