Baby Phat Going Bankrupt?
Published byÂ nwilliams on Monday, July 13, 2009 at 3:00 pm.
Itâ€™s real in these streets for celebrity fashion lines! Last monthÂ Jennifer Lopezâ€™sclothing line Sweetface went bankrupt and nowÂ Kimora Lee Simmonâ€™s line Baby Phat might be headed for the same fate.
The Wall Street Journal reported that Kellwood Co. – an apparel manufacturer whoâ€™s brandâ€™s include Baby Phat, Fabulosity, Phat Farm, Vince, and Xoxo, among others – may have to file for Chapter 11 bankruptcy if they canâ€™t come up with the money to pay a $140 million bond issue by Wednesday. Kellwood has over $500 million in debt and $800 million in annual sales and according to the report â€œthe twin effects of a heavy debt load and a sharp drop in consumer spending have crushed the companyâ€™s financial results.â€
Russell Simmons launched Phat Farm clothing in 1992, while his, then wife, model/designerÂ Kimora Lee Simmons, started Baby Phat in 1999. Russell sold Phat Farm and Baby Phat to Kellwood in 2004 for $142 million in cash plus performance incentives (at least he cashed out before the hard times hit!) though Kimora retained her position as â€œprincipal creative arbiterâ€ for Baby Phat.
So if it all falls down Kimora (and some 2,000 employees that Kellwood employs) might be out of a job and we may see the end of Baby Phat clothing. You mad?
Read about this story at: Â BET.com