Quiksilver, Inc., the surfwear maker, has filed for a Chapter 11 bankruptcy protection for its U.S. business on September 9, 2015, according to a press release issued by Quiksilver.
The company though, still plans to continue its business.
The Los Angeles Times reported that Quiksilver has been suffering from the declining popularity of apparel that emulates the lifestyle of surfers, skaters, and snowboarders.
The company has been losing its customers to fast-fashion brands like H&M and Forever 21.
Mitch Kummetz, an analyst at B. Riley & Co., told The Los Angeles Times that the surfer market is no longer cool.
"There are just fewer kids out there that think the surf market is cool," he said. "The heyday of the late '90s and the early 2000s is a distant memory."
Quiksilver said in the press release that their European and Asian-Pacific businesses are not part of the filing.
The company said that their business and operations in Europe and Asia-Pacific remain strong.
In the report, the company still sees a future in its core, Quiksilver, as well as Roxy women's wear and DC shoe brands.
Quiksilver said in the press release they have a "Plan Sponsor Agreement" with Oaktree Capital Management that provides a blueprint for the company's emergence from the chapter 11.
Under the "Plan Sponsor Agreement," Oaktree Capital agrees to provide all necessary funding for the chapter 11 process.
The company also mentioned in the press release that Oaktree Capital will convert its substantial debt holdings into a majority of the stock and become the majority owner of the restructured company upon its exit from bankruptcy.
Oaktree Capital is an L.A. firm that specializes in investing in troubled companies.
Pierre Agnes, CEO of Quiksilver, said in the press release that the filing of the bankruptcy is a difficult but necessary decision to secure the future of the company.
"With the protections afforded by the Bankruptcy Code and the financing provided by Oaktree, we will not only be able to satisfy our ongoing obligations to customers, vendors and employees, but we will also have the flexibility needed to complete the turnaround of our U.S. operations and re-establish Quiksilver as the leader in the action sports industry," he said.
Marshal Cohen, chief industry analyst of the NPD Group Inc., told The Los Angeles Times that Quiksilver may not retain the broad-based appeal it once held, but the brand has a future.
He said that the company has "too much heritage and too much familiarity" not to have a future.
