NEW YORK — Liberated Brands, a retailer known for its surfer and skater-focused brands such as Quiksilver, Billabong, and Volcom, has recently filed for bankruptcy and intends to close its stores throughout the United States.
This Chapter 11 bankruptcy petition was submitted in a Delaware court on Sunday. The California-based firm announced plans to wind down its North American operations after facing multiple challenges, including widespread economic turbulence, issues with the supply chain, and declining profits attributed to competition from “fast fashion” brands.
In an official statement, Liberated Brands acknowledged the hardships faced over the past year, noting that various factors—including a fluctuating global economy, shifts in consumer spending due to a rising cost of living, and ongoing inflation—have adversely impacted their performance.
Court documents reveal that the company intends to close all of its 124 physical stores in the U.S., terminate corporate office operations, and lay off nearly 1,400 employees. Liquidation sales have already begun, with over 100 store closures expected to follow, though specific timelines for these closures remain uncertain. Negotiations concerning nine stores located in Hawaii are currently ongoing.
While Liberated Brands is moving to close the majority, if not all, of its U.S. locations, the popular labels like Quiksilver, Billabong, and Volcom will continue to exist. These brands are owned by Authentic Brands Group, which has collaborated with Liberated to manage licensing in the U.S.
Authentic Brands confirmed on Friday that all licenses previously managed by Liberated have been reassigned to new partners even prior to the bankruptcy filing. David Brooks, the EVP of action and outdoor sports and lifestyle at Authentic, stated that they have been working closely with Liberated to ensure a smooth transition of essential licenses to reliable operators. Brooks further indicated that the number of physical U.S. stores held by Liberated was excessive and laden with underperforming locations, suggesting future rationalization possibly featuring a stronger presence through department stores or online sales channels.
In addition to its key brands, Liberated has also managed stores and sold products for other labels like Spyder, RVCA, Roxy, and Honolua.
During the peak of the COVID-19 pandemic, as consumer interest in outdoor and leisure apparel surged, Liberated experienced a spike in demand. However, the company eventually encountered difficulties due to larger economic pressures such as rising inflation, disrupted supply chains, and waning customer interest, as noted by CEO Todd Hymel in a sworn declaration.
Hymel described the challenges faced as a “lethal combination” that contributed to a substantial reduction in revenue. He pointed to ongoing struggles for brick-and-mortar retailers as online shopping became increasingly prevalent during the pandemic. Additionally, he highlighted the impact of fast fashion, stating that consumers now have easy access to inexpensive, low-quality clothing from fast fashion giants, resulting in decreased profit margins for companies like Liberated that have lost market share and pricing power to these brands.
Globally, Liberated claims to have marketed apparel in over 100 countries to date. The bankruptcy documents filed this week indicate that the company currently manages regional headquarters in North America, Europe, Japan, and Australia. Along with the decision to wind down its operations in North America, filings indicate that the company is also predicting potential sales of other global operations, either as ongoing concerns or on a liquidated basis.
