Back in 1993, Shoshanna Lonstein Gruss, then just Shoshanna Lonstein, became a tabloid darling because she dated Jerry Seinfeld at the height of his sitcom fame.
That was before you could be social media famous, but essentially, she was one of the first influencers, and she parlayed the fame of her four-year relationship into a successful career as a fashion designer.
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Lonstein Gruss was a rare person, back in those days, who managed to turn fame by association into a real career. Her Shoshanna clothing brand was respected and enduring, not an attempt to capitalize on her name recognition, as happened with Monica Lewinsky’s handbag line, or in a more recent example, Mike “The Situation” Sorrentino’s “Situation Nation” clothing line.
Shoshanna operates its own store, while also being sold at retailers including Saks Fifth Avenue, Neiman Marcus, and Bloomingdale’s. It also has some items for sale on Amazon.
Now the retail brand has filed for Chapter 11 bankruptcy, on the same day that Saks Global and Neiman Marcus also filed. (It’s important to note that the company behind the Shoshanna brand uses a slightly different spelling — i.e., Shoshanah Fashions.)
Lonstein Gruss may have started as a tabloid figure, but she has a deep history as a respected fashion designer.
“After 27 years of dedication and innovation, the Shoshanna collection has developed a legion of fans, including Mindy Kaling, Isla Fisher, Kelly Ripa, and The Duchess of Sussex, Meghan Markle. The collection can be found in luxury retailers like Bergdorf Goodman, Neiman Marcus, Saks Fifth Avenue, Bloomingdale’s, ShopBop, and Anthropologie as well as over 500 specialty stores in the United States, Canada, Europe, and Asia,” the company shared on its website.
Shoshanah Fashions has not made a public statement about its Chapter 11 bankruptcy filing. The filing, however, came on the same day Saks Global filed for Chapter 11 bankruptcy.
Saks Global’s Saks Fifth Avenue and Neiman Marcus are key distribution partners for Shoshanna Fashions, and the brand is almost certainly owed money by its partner, according to data shared with TheStreet by Ragini Bhalla, Head of Brand and Spokesperson for Creditsafe.
“Saks Inc. had a persistent and troubling pattern of paying vendors late in 2025, pointing to sustained liquidity problems. Days Beyond Terms (DBT) refers to the number of days late (i.e., past payment terms) that a company pays its bills. One of the most common indications that a company is struggling with cash flow is when its DBT is significantly higher than other companies in the same industry,” the research showed.
Saks’ DBT hovered between 30 and 41 between January and December 2025, which was more than three times higher than the industry average DBT of approximately 9.
Between June and September 2025, the company’s DBT rose consistently from 30 to 41 — a 37% increase in just three months.
Toward the end of the year (October through December 2025), the company’s DBT was about 32 to 33. This means the company typically paid vendors more than a month late.
“If a vendor and Saks agreed to Net 90 payment terms, that means they might not be paid for a single invoice for at least 4 months after fulfilling orders or completing services for Saks. While some larger vendors might have been able to wait that long to get paid, small and mid-sized vendors may not have had that luxury and could have had to make hard financial decisions for their own businesses,” Bhalla shared.
Vendor payment timing is one of the most critical, and fragile, parts of the retail business model.
When retailers delay payments to suppliers while continuing to demand standard delivery schedules, vendors are forced to finance production themselves. That often means borrowing at high interest rates or stretching their own payables, increasing financial risk across the supply chain.
In today’s high-rate environment, those delays are especially damaging, turning what might once have been manageable short-term gaps into prolonged cash-flow crises.
Saks’ Chapter 11 bankruptcy had a ripple effect on its suppliers.
“Within days, the exposure profile became unavoidable. Any organisation that relies on leveraged retail partners, extends trade credit, underwrites retail risk, or finances inventory now sits within the risk perimeter,” Lawyer Monthly reported.
Shoshanah Fashions, Inc. filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court on January 14, 2026.
The case is listed as Case No. 26-10083 (Chapter 11), indicating a voluntary bankruptcy filing.
The filing is part of a broader trend of retail and apparel sector bankruptcies in 2025-2026 that includes other retailers (e.g., Joann and Saks Global).
As with many early Chapter 11 cases, detailed court documents (e.g., schedules of assets/liabilities, creditor lists, reorganization plan) have not yet been publicly posted or widely reported. Source: PacerMonitor
Saks Global’s bankruptcy will impact its vendors.Shutterstock ·Shutterstock
Because Saks Global intends to continue operations, it has to reach a deal with vendors about unpaid bills. It’s likely that vendors won’t receive what their owed, according to Bhalla.
“Given that Saks also missed debt payments and filed for bankruptcy, it increases the likelihood that some vendors may never get paid for work completed or orders fulfilled. This data suggests that Saks was struggling with cash flow and liquidity for some time, contributing to its damaged relationships with suppliers. Ultimately, Saks’ failure to address these challenges likely played a role in its bankruptcy filing,” she wrote.
Saks struggled to line up funding for its Chapter 11 filing, according to CNBC.
“Ahead of the filing, Saks secured $1.75 billion in new financing from a group of the company’s senior secured bondholders and asset-based lenders. The lion’s share, $1 billion, is debtor-in-possession financing that will be used to fund operations while the company is in Chapter 11 while an additional $500 million will be available to the company after it emerges from bankruptcy, ” the website reported.
Even if vendors get partial payments, that process may take months as the bankruptcy works through the court.
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Saks did make a plan last year to pay past due balances.
“On February 14, the newly formed Saks Global announced its plan to pay vendors past due balances in 12 monthly installments beginning in July,” JD Supra reported.
The bankruptcy process is not bound by any previous agreements.
Founded in 1998 by designer Shoshanna Lonstein Gruss in New York City.
Signature Style: Known for flattering silhouettes, bold colors, and distinctive details; emphasizes femininity and fit.
Retail Presence: Carried at high-end retailers such as Saks Fifth Avenue, Bloomingdale’s, Neiman Marcus, and specialty boutiques in North America and internationally.
Swimwear Innovation: Early adopter of lingerie-inspired sizing in swim separates, setting a trend for more personalized fit in swim fashion.
Brand Growth: Expanded from dresses and eveningwear to include resort wear, swimwear, and seasonal collections, building a strong loyal customer base. Source: Shoshanna.com
Lonstein Gruss shared some of her fashion process with Fashion Weekly in July.
“The creative process for each collection starts long before we’re in design meetings; it’s always kind of running in the background. Inspiration usually isn’t one big moment; it’s more a collection of little sparks. I might spot an old magazine ad with an unexpected color combo, or come across a piece of art that sticks with me. I build from there, starting with color and print. I gravitate toward certain things again and again. I know what I love,” she said.
Lonstein has not commented publicly on the bankruptcy filing, and the brand has not acknowledged it on its website or social media feeds.
Related: 116-year-old shoe store shuts doors in widening retail crisis
This story was originally published by TheStreet on Jan 17, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
