Designer Betsy Johnson recently filed Chapter 11 Bankruptcy and now the label is under the management of Boston equity firm Castanea and Steve Madden.
This decision came after Johnson’s company failed to find a viable solution to address their dwindling profits and increasing debts. Johnson’s financial officer, Jonathan Friedman, says that they tried attracting new investors and selling portions of the company to gain access to more capital however these were not enough to pay off their creditors. Though Johnson was able to keep her job and remain as creative director, 350 of her employees had to be let go. The bankruptcy also cost her 63 major stores which will be closed in the coming months.