Lillian Vernon files for bankruptcy

Share this content:

On February 19, Lillian Vernon filed for Chapter 11 protection in the District of Delaware, along with several other entities including Lillian Vernon International Inc., LV Catalog Holding Corp., LVC Retail Corp., Everyday Celebrations Inc. and Rue de France Inc.

Lillian Vernon laid off 50% of its workforce on February 15, saying that it is considering strategic alternatives including a possible sale of the company.

The news follows a series of staff reductions and other cutbacks, including a reduction in circulation, over the past year.

When Sun Capital acquired the company in 2006, Lillian Vernon's losses were around $22 million, said Michael Muoio, president/CEO of the company. Merchandising, overhead and other issues were resolved during the following year, reducing losses to $3.9 million. However, increasing paper, postage and freight costs made it impossible for Lillian Vernon to entirely bounce back from its earlier problems.

“The cost increases were impossible to overcome,” Muoio said. The current economic situation hasn't helped, either.

Sun Capital has said it is not going to fund Lillian Vernon going forward. As a result, it is cutting back staff and looking for a potential buyer with the help of investment bank Gruppo, Levey & Co.

“The company will probably be sold in a relatively short period of time,” Muoio told DMNews. Lillian Vernon will consider selling the company in pieces if necessary.

In the mean time, Lillian Vernon will “continue to operate as long as it possibly can,” Muoio said.

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above