Baby Phat Headed To Bankruptcy Court?

Clothing manufacturer Kelliwood Co. which owns Baby Phat, Phat Farm, Sag Harbor and XOXO brands, have fallen on hard times. The biggest issue they are facing right now is a $140 million bond that will mature and become due Wednesday, July 15.

Kellwood Co. hired financial advisors to restructure the company’s debt, but timing may not have been on their side.

Kellwood Co.’s President and Chief Executive Michael Kramer tried to defer the bond payment by swapping it with bonds that mature in 2014, however Deutsche Bank wasn’t having that.

Meanwhile, Kellwood Co. has this $140 million bond hanging over their heads, the company currently has about $500 million in debt while bringing in approximately $800 million in annual sales.

Phat Fashions, which was co-founded by Russell Simmons was sold to Kellwood for $140 million in 2004, plus performance incentives. Kimora Simmons retained her position as “principal creative arbiter” for Baby Phat.

Source

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