New York-based Sasson Jeans Inc., the licensing firm that took a chic name and parlayed it into a fashion power, on Friday filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in U.S. District Court in Los Angeles.
The company listed debts of more than $7.5 million and assets of about $11.5 million. The firm said its largest creditor, Men's Sportswear Inc. of North Bergen, N.J., is owed $1.1 million.
Paul Guez, listed as sole stockholder of the privately held company, declined to comment when reached at his Los Angeles office on Friday. But in recent weeks, Guez had acknowledged in an interview with Women's Wear Daily that his company, which licenses apparel makers to use the Sasson name on blue jeans and sports wear, had been beset by legal squabbles with two of Guez's brothers who sought control of Sasson.
During the late 1970s and early 1980s, Sasson Jeans--along with other high-priced designer brands--commanded center stage in the American fashion world.
However, the $5.5-billion-a-year domestic jean market has matured, experts say. And makers of designer jeans have been hurt by imports, which hold about 20% of the U.S. jean market.
Competition was so heated that in 1980, hair stylist Vidal Sassoon brought a $25-million lawsuit against Sasson Inc. for the "appropriation of its name."
The suit was settled after Sasson agreed to minimize confusion by not pronouncing the last syllable of Sasson jeans so that it sounded like the word soon.