The retail sector has faced growing economic challenges since the Covid-19 pandemic, leading to financial distress, store closings, and bankruptcy filings.
Among the issues retailers have faced are higher costs of labor and products driven by rising inflation, increased interest rates on their debt obligations, changing consumer preferences for brick-and-mortar retail shopping, and lingering effects of Covid-19.
The Trump administration added another economic issue earlier this year with additional tariff levies on foreign goods, which increased the costs of certain retail items.
Bankrupt companies begin to blame tariffs
Financially distressed companies that filed for bankruptcy protection this year are blaming new tariffs for their economic problems in documents submitted in their cases.
A major men’s and women’s fashion accessories retailer has joined companies that claim tariffs have harmed their businesses.
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Fossil files for Chapter 15 bankruptcy
Popular wristwatch and accessories retailer Fossil Global Services Ltd. filed for Chapter 15 bankruptcy protection, seeking U.S. recognition of its U.K. restructuring plan as a foreign proceeding.
The Milton Keynes, U.K.-based watch and accessories manufacturer filed its Chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on Oct. 20.
Fossil files for restructuring in U.K.
The debtor filed its proposed restructuring plan in the High Court of Justice Business and Property Courts of England and Wales on Oct. 9, seeking to refinance a $150 million asset-based revolving credit facility with JPMorgan Chase Bank N.A. and $150 million in unsecured notes with notes trustee Bank of New York Mellon N.A.
The restructuring plan would also provide $32.5 million in new money financing to the debtor.
Fossil faced an extremely challenging retail environment in recent years, according to a Chapter 15 declaration filed by Chief Financial Officer and Foreign Representative Randy Greben.
The global watch and accessories market has faced fierce competition over the last 10 years from high-tech competitors Apple and Samsung and direct-to-consumer establishments that grabbed a significant share of the market.
Apple, Samsung impact Fossil’s business
Evolving consumer preferences shifted toward wearable technologies, such as Apple Watch and Samsung Galaxy Watch, leading to slower-than-expected consumer demand for Fossil’s products, the declaration said.
Fossil’s sales plummeted $1.7 billion in 2022 to $1.1 billion in 2024, and the company’s net loss grew from $44 million in 2022 to about $106 million in 2024.
Fossil financial comparison
- Fossil’s sales 2022: $1.7 billion.
- Fossil sales 2024: $1.1 billion.
- Fossil’s net loss 2022: $44 million.
- Fossil’s net loss 2024: $106 million.
The debtor launched a strategic review in early 2023 and, in 2024, implemented a turnaround plan to refocus its core businesses, rightsizing its cost structure, and strengthening its balance sheet.
The debtor sought the sale of three non-core brands in December 2024, and an offer for one brand was agreed upon, but the transaction didn’t move forward due to concerns related to international tariffs and increased production costs.
New tariffs levied by the U.S. government on foreign products in early 2025 negatively impacted the debtor’s business, as most of its products are assembled or manufactured overseas, with a substantial majority imported from China, the declaration said.
Tariffs impact Fossil’s profits
The company determined that tariffs negatively impacted its gross margin by 0.8% in the second quarter of 2025.
The debtor’s products include watches, jewelry, handbags, small leather goods, belts, and sunglasses, which it designs, develops, markets, and distributes under various owned brands, including Fossil, Skagen, Relic, Zodiac, and other licensed brands.
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Fossil operated 214 stores worldwide and employed over 4,500 employees, as of July 2025. The company sells its products across 130 countries worldwide through various distribution channels, including wholesale, direct-to-consumer through retail stores, e-commerce, and third-party distributors.
In certain international markets, the debtor’s products are sold online and through licensed and franchised Fossil retail stores, retail concessions operated by the company, and kiosks, and it offers online and in-store sales in the U.S., Europe, and Asia.
The debtor is a subsidiary of its ultimate parent Fossil Group Inc.
Fossil’s retail products
- Watches
- Jewelry
- Handbags
- Small leather goods
- Belts
- Sunglasses
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