Save those Habitual jeans. According to WWD, the premium denim label is on the auction block and could find itself in the hands of new owners by next month.
Parent company Pacific Marketing Works Inc. (PMW) filed for Chapter 11 bankruptcy protection on February 20 and is looking to sell its assets in an effort to repay as much as $10 million in liabilities. The Los Angeles-based company owns the Habitual label, in addition to two other brands that specialize in T-shirts and graphic tops.
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According to bankruptcy court filings, PMW is "in severe financial distress as a result of…a sale or merger transaction that failed late last year." Sources said last year PMW had been in talks to merge with a Japanese company that abruptly pulled out of the deal and left PMW in financial disarray.
According to the filings, PMW has assets of between $500,000 and $1 million, and liabilities of $1 million to $10 million.
Habitual’s founders and original designers has been battling PMW for more than two years. Michael and Nicole Colovos founded Habitual in 2001 and were runners-up for the Council of Fashion Designers of America/Vogue Fashion Awards in 2004. The relationship between PMW and the Colovoses began to sour soon after the two parties signed an agreement giving each a 50% share in Habitual.