On Monday, Southern Pines-based R. Riveter filed for federal bankruptcy protection that company founders say will allow them to restructure debts and work toward becoming profitable again.
Co-owner and co-founder Cameron Cruse said R. Riveter will continue operations, including operating its flagship store in downtown Southern Pines, but the Chapter 11 filing will help protect the company from creditors as it works to readjust and move forward following a challenging time for retail.
“It’s something that we’re doing to reset and restructure,” said Cruse. “We’re trying to get through a tough time through the remainder of the year and then reset with no major changes to the operations, other than some efficiencies that we’ve made along the way to not have this happen again.”
The filing, made voluntarily on Oct. 21 in the United States Bankruptcy Court for the District of Delaware, was to proceed with a subchapter five filing of Chapter 11 of the federal bankruptcy code. According to the U.S. Justice Department, small business debtors with less than $2.75 million in debts can voluntarily elect to request Chapter 11. Subchapter five imposes shorter timelines for filing reorganization plans, but allows for greater flexibility in negotiating with creditors.
After the initial filing, a debtor is assigned a trustee by the U.S. DOJ Executive Office for United States Trustees, who serves as a mediator between the debtor and creditors during the process. The company then has 180 days to submit a restructuring plan, but Cruse said R. Riveter is close to finalizing that plan.
“We’ve gotten to a point where it’s almost done,” she said. “We’ve already taken a lot of steps to be more effective in our operations to get to the point where we’re profitable again.
“It’s not a secret that 2023 and 2024 were really hard years for retail and a lot of the economy is struggling. We’re in the handbag business, so we’re not necessarily a necessity. We’re looking forward to getting through kind of a difficult time and then moving forward to hopefully more success.”
Cruse and co-owner Lisa Bradley, both military spouses, started the handbag and accessory business as an answer to a question that was common in their circles: How do military spouses, who can move every two to three years, create a steady source of income for their families? The two of them eventually created a network of ‘riveters,’ remote operators who work constructing components for the handbags.
They opened their first brick and mortar in 2014, around the corner from their current location in downtown Southern Pines.
“We’ve got Laura (Vien), our flagship store manager there, and she’s amazing. I’ll tell you the flagship store is really thriving, and that’s largely due in part to the Moore County support and just the incredible support that they’ve always shown us.”
Over the years the company has enjoyed national attention for their unique mission. Most notably, during a 2016 appearance on the investment reality TV show “Shark Tank.” They secured a $100,000 investment from Mark Cuban, positioning him as a 20% minority owner.
In 2015, the company posted $300,000 in sales. In 2017, it had seen 600% growth and revenues were about $2 million. R.Riveter has partnered with Jeep, Home Shopping Network, the United States Golf Association and others, building the brand’s recognition. Cruse said in the past few years they’ve fluctuated between $3.5 million and $5 million depending on contracts.
“It really just depends on the year, and a big customer like QVC can make a big difference,” said Cruse. “We lost QVC in 2022, and we lost HSN in 2022, as well. I believe it was the same year.
“When you work with HSN and QVC, it’s really about your buyer relationships, and our new buyer at HSN did not see the value in our company, which is unfortunate.
“So, we’re just trying to rebound from losing such a big, big company and a big customer, and resize our operations to fit our DTC (direct-to-consumer) channels.”
Cruse said the company currently employs 13 to 14 people and works with around the same number of remote operating riveters, though that number fluctuates regularly. Following North Carolina’s COVID-related business operation protocols, the company closed down a manufacturing facility in Aberdeen and moved the bulk of its fabrication to Florida.
She said the company will continue to assemble its custom Heirloom Series in North Carolina, though that offering is currently on hold.
“The heirloom operation is the custom handbags made from old uniforms, duffel bags, people’s family items, so we never want to risk the execution of that,” said Cruse. “Right now that’s on pause just until we get back on our feet and we feel really good about where we are.
“We are working really hard to get our operations the most efficient we possibly can, so that we can continue to provide high-quality experiences and pay and make sure that we are fulfilling the mission that we set out to do,” she said. “The healthier we are as a company the more that we can give back and continue our mission, so we’re just trying to get back to that.”
Contact Frank Daniels IV at (910)693-2486 or frank@thepilot.com.
This story was originally published in The Pilot newspaper.
