The west coast denim brand with the Buddha, True Religion might be in dire need of financial help.
According to a report by Reuters, True Religion has been consulting with law firm Kirkland & Ellis LLP discussing ways to restructure and reduce the jean label’s debt.
With a distinct over-washed style and bold stitching details, True Religion’s aesthetic has fallen out of favor with consumers, peaking in popularity during the mid-2000’s. Now according to Reuters’ anonymous sources, the denim label has been forced to consider bankruptcy or possibly negotiating with their lenders.
Reuters cites two factors that indicate True Religion is very possibly in poor financial standing. For one, they reference a $400 million term loan of True Religion that was trading for 27 cents on Tuesday, claiming that such a low quote for the loan is evidence of their financial distress.
Second, Moody’s report on True Religion from June that says the label is at high risk of default or distressed exchange, after TowerBrook, the investment management firm that purchased True Religion in 2013, has bought back $22.8 million of the company’s first lien term loan for $14.4 million.
Reuters claims that the sources remained anonymous because of their close relationship to the confidential talks, and they stress that a decision has not been made between True Religion and the lawyers yet.