US-based Ascendia has fallen victim of the credit crunch and retail slowdown forcing the beauty and health firm to file for bankruptcy protection.
The maker of bath, health and beauty care products achieved a turnover of $75.8m for the six months ending August 25 last year but was unable translate these sales into profit.
Filing for voluntary reorganization under Chapter 11 Ascendia continues to operate as a going concern but is urgently seeking a buyer.
In talks with potential buyers
The company said discussions had already begun with prospective buyers and the sale of the firm is expected to be completed by the end of September.
In the meantime Ascendia remains in business having secured financing from senior secured lenders.
The company fell into financial difficulty because it was unable to service its high levels of debt as the credit markets tightened.
Problematic bath brand aquisitions
Cash flow problems also surfaced due to the marketing costs associated with the re-launch of the Healing Garden brand.
Ascendia had bought specialty bath brands Healing Garden and Calgon from Coty in January 2007 for $125m.
Despite falling into financial difficulties Ascendia still claims to have considerable potential but will have to trim itself down to restore the balance sheet to health.
“The company will discontinue unprofitable products in order to focus on strong brands and high margin products within those brands and consolidate distribution centers,” said Douglas Booth, a partner at the Carl Marks Advisory Group, who has recently been appointed chief restructuring officer.
Booth will take over responsibility for running the firm after Steven Scheyer resigned as President and CEO and member of the board of directors.