The Colombian textile giant Encajes SA has requested to comply with Law 1116, also known as the country’s bankruptcy law, according to a report published by the Primera Página portal on Tuesday, March 19.
Supersociedades, the Superintendence of Companies, confirmed that Encajes SA, a supplier to renowned brands such as Victoria’s Secret, Calvin Klein, Tommy Hilfiger, and Leonisa, has submitted a document claiming to be facing difficulties. As a result, the company’s application for business reorganization has been admitted, freezing creditors to allow the company to continue operating.
The application cites challenges such as a decrease in demand for products, a significant drop in sales, and high inflation affecting expenses and costs. Despite these difficulties, it was revealed that one of the owners of Encajes SA, León Bibas, had recently purchased an expensive apartment in an exclusive area of Miami.
Encajes SA, founded in 1978 by businessman Marco Bibas and later developed by his son León Bibas, became a major exporter of lace in Colombia, representing 65% of the country’s total lace exports by 2021. The company also expanded its operations to over 40 countries with offices in New York, Miami, Hong Kong, and China.
In a controversial move, it was reported that León and Andrea Bibas acquired a luxurious condominium in Sunny Isles Beach, Florida, while the company was facing financial challenges during the pandemic. This has raised questions about the company’s decision to seek protection under the Corporate Insolvency Law despite making such purchases.
Encajes SA also highlighted factors such as high interest rates, inventory cuts, and concerns about potential labor reforms in Colombia as reasons for seeking the benefits of the Bankruptcy Law. With the government working on legislative reforms, the company aims to navigate through challenging economic conditions affecting its operations.
As the situation unfolds, the fate of Encajes SA and its efforts to reorganize under the bankruptcy law will continue to be closely monitored.