(Mario Beauregard/CP)
Mexx International, the fashion retailer that offered low- to mid-priced apparel and accessories for women, men and kids, was born in Amsterdam in 1986. It was the third child of Rattan Chadha, who took the initials of his first and second efforts—a men’s brand called ‘Moustache’ and a women’s brand called ‘Emanuelle’—and sealed the match with two kisses to give birth to ‘Mexx.’
The Dutch fashion chain, which drew inspiration from the energy and buzz of cities and was aimed at a younger customer, emerged at a time when oversized, over-the-top fashion and everyday dance and exercise wear were in vogue. As the retailer grew older, Mexx traveled the world, becoming an international brand. At its peak, the company had more than 800 stores (including franchises and wholly-owned branch stores) in over 40 countries, and employed upwards of 6,000 people.
But at the turn of the century, Chadha decided his baby needed a helping hand to continue to evolve. He sold the privately-owned business to Liz Claiborne Inc. in 2001 as the U.S. fashion company was looking to diversify its portfolio. The deal was worth approximately €300 million, or US$264 million, including the assumption of debt and an earn-out equal to 28% of future earnings.
The deal was intended to allow Mexx to leverage its new parent’s years of expertise with design and sourcing capabilities for its own products, and help Liz Claiborne diversify its portfolio to capture a younger customer. But as the years went on, and both Mexx and Liz Claiborne grew older, the parent company began to struggle and started looking for potential suitors for Mexx.
The Gores Group, a Los Angeles-based private equity firm, came knocking. In 2011, Mexx moved out of Liz Claiborne’s home, and settled in with its new partner. But Mexx’s first suitor wasn’t too far away—the Gores Group owned 81.75% of the company while Liz Claiborne retained 18.25%. At the time of the acquisition, Gores had high hopes of getting Mexx back on its own feet: re-activating the Mexx brand, building its e-commerce business, and continuing to develop its European and Canadian operations.
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In February 2013, Julia Hansen was hired as Mexx’s president and chief creative officer, and given the task of breathing new life into the fashion brand. When she visited Montreal in May 2013, the seasoned apparel executive admitted that the Dutch chain was in poor health, having failed to keep up with the style and trends of the times or to become a unique and distinct brand. Hansen was planning to get Mexx’s life back in order, but she couldn’t get the brand’s act together soon enough.
On December 4, having settled at 315 stores worldwide, Mexx filed for bankruptcy protection in Amsterdam. Its offspring, Mexx Canada, which had 95 stores across the country and was carried in other retail chains like Hudson’s Bay Company, did the same. In a statement addressing the company’s demise, Hansen said that while there were fans of Mexx’s latest collections at both the industry and customer levels, “macro-economic headwinds” including a slowdown in retail sales in Europe, Russia’s currency depreciation and Eastern European political unrest meant the company’s health couldn’t be revived to fighting form. The Canadian retail playground has also gotten too crowded, with foreign fashion brands like H&M and Zara increasing their market share by driving down prices and constantly changing styles. Middling brands like Mexx and Le Château have failed to compete with such speed and thriftiness.
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Mexx Canada has 30 days to get its affairs in order and come up with a restructuring plan, and can request life support in the form of extensions for up to six months.
Mexx may have started with two kisses, but it seems it has now been given the kiss of death.
