The uncertainty of the COVID-19 era continues to wreak havoc on companies of all sizes.
New York-based Rubie’s Costume Company Inc. and certain of its affiliated companies have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the Eastern District of New York in Central Islip. The family-owned company hopes to facilitate financial restructuring under Chapter 11. Rubie’s is the world’s largest designer, manufacturer, and distributor of costume and related party accessories servicing more than 2,000 retail accounts.
The company maintains licensing partnerships with major studios including Disney, Marvel, Lucasfilm, Warner Bros., and Nickelodeon for a wide range of products inspired by Star Wars, Harry Potter, JoJo Siwa, DC Comics, Stranger Things, Ghostbusters, WWE, and many more.
“Given the highly seasonal nature of our business, our manufacturing relationships in China, the chilling impact of the COVID-19 pandemic on the U.S. and the global economy and potential liquidity pressures, the Board of Directors determined that the Chapter 11 filing is our best path forward as we carry out our restructuring efforts,” says Rubie’s President Marc P. Beige. “We believe that this decision will best serve our customers, licensors, employees, and business partners.”
As we recently reported, Rubie’s had cut 75% of its workforce as its California and New York-based facilities were deemed non-essential as of March 26. The company shifted its manufacturing facilities to assist in the production of hand sanitizer and personal protective equipment (PPE) to aid in the fight against COVID-19.
The company says that it “plans to use cash collateral and is engaged in the process to place a new financing facility, along with the continued support of the Beige family, that will provide for the continuation of its operations, including payments to vendors, employees, customers, and creditors.”
The companies have filed customary first-day motions with the Bankruptcy Court to support operations during the court-supervised process, including motions requesting authority to pay prepetition employee wages and benefits and to continue customer and licensor programs.
Rubie’s affiliated companies include Imagine by Rubie’s, Morbid Enterprises, Princess Paradise, and Forum Novelties.
Prior to the COVID-19 pandemic, Rubie’s was looking forward to a big year filled with new licenses and product offerings including Universal Monsters, Baby Shark, The Munsters, and more. Some items in the upcoming lineup were adversely affected by release date shifts caused by theater closures and production stoppage. The company holds licenses for Ghostbusters: Afterlife, Top Gun: Maverick, Minions: The Rise of Gru, Marvel’s Falcon and the Winter Soldier, Marvel’s Eternals, Marvel’s Black Widow, and more — all of which have seen release dates pushed back as much as a year.
Meyer, Suozzi, English & Klein, P.C. and Togut, Segal & Segal LLP are serving as Rubie’s legal counsel, BDO is serving as its restructuring advisor, and SSG Capital Advisors LLC is serving as its investment banker. The New York filing can be found under case No. 20-71970.
Guess thats what happens with your have a tyrant CFO who berates employees and customers at the slightest uncertainty, maybe loosen up the sweater vest bud. He’s taken a couple of companies the Chapter 11 route, so I’m sure he’ll steer this ship right back to profitability! clown shoes
I think Rubies has the foundation and Experience to manuever in any direction that they deem will create a successful business model.
Exactly. Their demise started many years ago when they decided that Walmart and Amazon were going to be their bread and butter. After putting hundreds of independent stores out of business, and then realizing that Walmart, Amazon and Target were not allowing Rubies to be profitable, they start selling direct to consumers…even further cutting the legs off of small businesses. No sympathy here. They made their bed and now they have to lie in it.
Businesses plan out a year or more in advance for production and distribution of their products. An interruption like this is killer form many small businesses, especially ones with changing product lines that depend on scheduled production runs. Add in that most businesses do not have money lying around, they make their money work for them, when it comes to a shut down like now, it is killer for a majority without some help. Rubies filled a niche market and I am sure it will be missed by many if they cannot restructure under this.
Love how they blame in on COVID19! This was coming long before COVID19.