Introduction
True Religion Apparel Inc., a premium brand that sells jeans between $159 and $339 since its founding in 2002, survived for its first decade in an extremely competitive environment. Partly due to its appeal to both men and women, and the fact that denim is only two-thirds of its sales, True Religion possessed enough value in 2013 to be purchased by a private investing firm, TowerBrook Capital Partners (Graf, 2017). In a deal that was valued at $824 million, True Religion’s then stockholders reaped a 24% jump over the current stock price (Brown, 2013). In terms of its continued viability, however, True Religion is rapidly going out of style.
Will its success be redefined?
True Religion emphasized brand management, especially …show more content…
To now, True Religion has built brand recognition by marketing their products to fashion-aware, affluent customers who want to wear and be seen in the latest, trendiest, jeans and related apparel. True Religion originally limited distribution to exclusive boutiques, specialty stores, and department stores to promote their brand uniqueness and justify the retail price range of $170 to $300 per pair. They manufacture their clothing in the United States for the "Made in the U.S.A." status as well as to control costs and minimize fixed overhead (True Religion Apparel Inc. Company Profile, n.d.).
In theVRIO framework, True Religion possessed a significant advantage over competitors in the question of imitability (I). True Religion developed special sewing machines to handle their one-of-a-kind designs. With its five-needle thread at two-stitch-per-inch process, the Super T stitch created a noticeable style unlike any other denim brand. True Religion clothing became synonymous with quality craftsmanship and bold style designed for instant recognition (About True Religion, …show more content…
EBITDA evaluates a company's performance without having to factor in financing decisions, accounting decisions or tax environments. Unless a generous financial partner appears, True Religion is on the verge of defaulting on its $485 million debt load. The lack of funds means True Religion will experience difficulties with store staffing and product marketing. Currently, True Religion has a 16x debt-to-EBITDA ratio. Analysts want True Religion to reduce the ratio to 6x in order to move into a sustainable capital structure (Graf,
True Religion Apparel Inc., a premium brand that sells jeans between $159 and $339 since its founding in 2002, survived for its first decade in an extremely competitive environment. Partly due to its appeal to both men and women, and the fact that denim is only two-thirds of its sales, True Religion possessed enough value in 2013 to be purchased by a private investing firm, TowerBrook Capital Partners (Graf, 2017). In a deal that was valued at $824 million, True Religion’s then stockholders reaped a 24% jump over the current stock price (Brown, 2013). In terms of its continued viability, however, True Religion is rapidly going out of style.
Will its success be redefined?
True Religion emphasized brand management, especially …show more content…
To now, True Religion has built brand recognition by marketing their products to fashion-aware, affluent customers who want to wear and be seen in the latest, trendiest, jeans and related apparel. True Religion originally limited distribution to exclusive boutiques, specialty stores, and department stores to promote their brand uniqueness and justify the retail price range of $170 to $300 per pair. They manufacture their clothing in the United States for the "Made in the U.S.A." status as well as to control costs and minimize fixed overhead (True Religion Apparel Inc. Company Profile, n.d.).
In theVRIO framework, True Religion possessed a significant advantage over competitors in the question of imitability (I). True Religion developed special sewing machines to handle their one-of-a-kind designs. With its five-needle thread at two-stitch-per-inch process, the Super T stitch created a noticeable style unlike any other denim brand. True Religion clothing became synonymous with quality craftsmanship and bold style designed for instant recognition (About True Religion, …show more content…
EBITDA evaluates a company's performance without having to factor in financing decisions, accounting decisions or tax environments. Unless a generous financial partner appears, True Religion is on the verge of defaulting on its $485 million debt load. The lack of funds means True Religion will experience difficulties with store staffing and product marketing. Currently, True Religion has a 16x debt-to-EBITDA ratio. Analysts want True Religion to reduce the ratio to 6x in order to move into a sustainable capital structure (Graf,