NexCen Brands Inc., the licensing and franchising company that sank 77 percent yesterday after saying it may have a cash “shortfall,” said it can’t rule out bankruptcy as it considers its options.
“As noted in our SEC filing yesterday, the company believes there is substantial doubt about our ability to continue as a going concern,” the company said today in a statement e-mailed to Bloomberg News.
This company was on a tear with purchasing several restaurant brands such as Maggie Moo’s, Marble Slab and Great American Cookie. Now look. They stock has plummeted and there is talk of the company filing Chapter 11. They just appointed a new CFO in March and it is tanking hard.
This may be one of the first of many casualties in the restaurant industry for 2008. It is not surprising that rapid development like Nexcen in today’s current economy was going to eventually catch up. From shoes to fashion to pretzels and ice cream, I think that D’Loren’s strategy of diversifying is not the answer here.
I would be interested to see if Iconix, a smaller but similar model to Nexcen will follow suit.
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