Rock & Republic filed for Chapter 11 bankruptcy protection on Thursday.
For those of you who live and die by the brand's embellished jeans, shoes and handbags, don't shed a tear just yet: Chapter 11 doesn't always mean the company is going to shutter. In Rock & Republic's case, filing for bankruptcy protection gives it a chance to reorganize its company structure.
The move serves as a prime example as to why small and medium sized fashion businesses are still on shaky ground despite the influx of available money from eager investors. Indeed, R & R said it would rely on a line of credit from CIT Group, a firm that filed for Chapter 11 just one year ago.
CIT is a bank that provides loans to pretty much every fashion line out there that's not attached to a big company. Granted, the firm just received a $1 billion investment, so it's doing better now, but the situation just proves that fashion is not out of the recessionary waters just yet.