Lycra has filed for Chapter 11 bankruptcy protection to facilitate a capital restructuring as the fashion tech company struggled with heavy debts.
As part of the process, the company has entered into a restructuring support agreement (RSA) with the majority of its creditors to eliminate approximately $1.2 billion of long-term debt.
The RSA includes a prepackaged plan of reorganization, which reflects a consensual agreement reached after several months of discussions with the company’s key financial creditors.
Lycra said the restructuring will not affect its manufacturing operations, customers, vendors or employees. It expects to emerge from the Chapter 11 process within 45 days.
To support ordinary course operations, the company has obtained commitments for $75 million in debtor-in-possession financing and more than $75 million in exit financing.
“Today marks a significant milestone for The Lycra Company as we are taking decisive action to meaningfully reduce our debt and strengthen our financial foundation,” said CEO Gary Smith.
“By taking this step, we will continue serving our customers, supporting our partners, and providing the high-quality products on which they rely.”
Founded in 1958, The Lycra Company produces fiber and technology solutions for the apparel and personal care industries. It also owns consumer brands including Lycra, Lycra HyFit, Lycra T400, Coolmax, Thermolite, Elaspan, Supplex and Tactel.
The Delaware-based business had been struggling since its acquisition by China’s Ruyi Textile and Fashion International Group Limited in 2019. Lenders took over in 2022 after the company defaulted on its debt, but its weak performance persisted due to falling demand, increased competition, and the impact of US tariffs.
