Bankrupt fashion labels are finding that there is life after liquidation — but only if resurrection happens quickly, according to an analysis in the Wall Street Journal today. Investors snapped up Wet Seal, American Apparel and The Limited, betting fickle consumers who long ago stopped visiting their shops would flock to new online-only storefronts. Companies like Onestop Internet Inc., which handles orders for dozens of websites out of a warehouse in Compton, Calif., make it easier for former brick-and-mortar chains to transition to online-only fashion labels. But a successful transition requires racing against the clock. A once-hot brand like American Apparel can fetch tens of millions of dollars in a bankruptcy auction, but its value quickly drops after stores close. New owners must rush to line up new designers and manufacturers, and set up distribution networks geared toward shipping to homes before shoppers move on.
