Diesel USA Inc., the American business of Diesel SpA, an Italian Jean brand, has filed for bankruptcy recently as demand for high-end jeans at a unit price of $200 has been weakening for years, coupled with its own strategic failures and lax management.
Diesel USA Inc., in its filing with the Delaware Bankruptcy Court, pointed out that it had exclusively distributed the Diesel brand in the United States since 1995, with 380 employees, 28 independent stores and wholesale businesses. Current assets range from $50 million to $100 million, while liabilities range from $10 million to $50 million.
Management made it clear in the document that sales slump, years of losses, high rents and fraud and theft were the main causes of corporate bankruptcy. Mark Samson, chief restructuring officer of Diesel USA Inc., said sales at 28 independent stores have fallen by more than 40% in the past four years, from $125 million in 2014 to $72.5 million. At the same time, the former management has made a strategy of expanding in the golden area at all costs. During 2008-2015, the company’s capital expenditure amounted to $90 million, most of which was invested in physical stores.