Fashion designer Betsey Johnson's licensing company, Betsey Johnson LLC has filed for Chapter 11 bankruptcy. Almost all of the designer's boutiques are expected to close, with estimated 350 staff members losing their jobs.
According to Forbes, the bankruptcy filing listed "severe liquidity problems" along with $4.1 million owed to vendors, manufacturers and more.
In 2010 Steve Madden bought Betsey Johnson LLC's outstanding debt (a reported $48 million loan), reported the Huffington Post. Since buying Betsey Johnson, Steve Madden has control over the label.
"While this particular licensee may be closing, the Betsey Johnson brand is stronger than ever, with a thriving wholesale business across a range of product categories," said Madden. "As the owners of the Betsey Johnson brand, we at Steve Madden remain firmly committed to Betsey Johnson -- the designer, her vision and our growing wholesale business -- which is up over 50 percent so far for 2012."
Steve Madden also assured customers that " existing orders will be produced and ship on time."
Stores will also continue carrying Betsey Johnson clothing. Saks Fifth Avenue, Bloomingdales and Nordstom's are among other stores that will still be selling the clothing.
Betsey Johnson, 69, expressed her concern over the filing. "I feel so sad for my store people and all my pink girls," said Johnson on Thursday. "They live and die for me. But I need to be better. I really need to work well and be more efficient."
Besides the filing, Johnson is ready to move forward. "I love our brand!" she said in a press statement. "As creative director, it's full speed ahead at Betsey."
It was revealed last week that Johnson will be appearing in a reality show on the Style Network with her daughter Lulu. No word on whether the show, entitled "Betsey + Lulu," will air the current financial problems.