On October 20, 2025, Fossil Global Services Ltd. filed for Chapter 15 bankruptcy in the state of Texas. They are asking a U.S. court to recognize a restructuring plan led by the UK. The fashion accessories brand, which started in 1984, has $300 million in debt.
This includes $150 million in unsecured notes due in November 2026 and $150 million in revolving credit. This financial crisis puts over 4,500 jobs at risk worldwide, affecting 214 stores across 130 countries. This is a significant decline for a company that was once known for offering affordable luxury.
Tariff Pressures
New U.S. tariffs on imported goods—particularly from China—dealt a serious blow to Fossil’s business model. With production based overseas, the company saw its gross margin shrink 0.8% in Q2 2025.
“New tariffs levied by the U.S. government on foreign products in early 2025 negatively impacted the debtor’s business,” said CFO Randy Greben in bankruptcy declarations. Combined with rising production costs, these trade measures cut profits and accelerated the financial decline, pushing management to seek legal protection.
Disrupted Industry
Over the last decade, the watch industry has undergone significant changes. Tech companies like Apple and Samsung now lead the market with smartwatches that offer connectivity, health tracking, and lifestyle features.
Fossil stopped making smartwatches in early 2024 because it couldn’t keep up, thereby forfeiting its opportunity to grow in the wearable tech market. This exit shows Fossil’s struggle to adapt to changes in digital technology.
Financial Freefall
From 2022 to 2024, Fossil’s sales declined from $1.7 billion to $1.1 billion, representing a 35% drop. The company’s net losses more than doubled, increasing from $44 million to $103 million.
Fossil plans to close about 50 stores as part of a larger restructuring effort. During this period, the company utilized over $100 million in cash for its operations, which negatively impacted its liquidity and further exacerbated its financial situation.
Impact On Employees
Over 4,500 workers could lose their jobs as Fossil plans layoffs in several countries. The company plans to transition to a distributor-based model in certain markets, which will result in the elimination of direct jobs.
Employees are unsure about severance pay, benefits, and the future of their stores. Morale has dropped as long-time employees wonder if the 41-year-old company can survive.
Broader Ripple Effects
Fossil’s problems affect more than just its employees. Suppliers, landlords, and local partners are preparing for financial difficulties.
Closing stores will result in fewer shoppers in malls, which can harm nearby businesses and lower property values. Smaller vendors that depend on Fossil’s orders may experience delays in payment or financial losses. Communities with Fossil stores could face job losses and lower tax revenue.
Leadership’s Response
Franco Fogliato became CEO in 2024 and is leading a plan to improve the company by cutting costs and changing operations. The company is accelerating its “Transform and Grow” strategy, which was launched in 2023. CFO Randy Greben, who was appointed in March 2025, handles complicated debt talks.
The leadership team must restore profitability and keep the trust of stakeholders while dealing with bankruptcy.
Recovery Roadmap
Fossil’s plan aims to save $100 million annually by reducing selling, general, and administrative (SG&A) expenses, closing underperforming stores, and focusing on its core products: watches and leather goods. The strategy involves enhancing operational efficiency across 27 subsidiaries and 63 independent distributors.
The company intends to strengthen its key brands—Fossil, Skagen, and Michele—while eliminating unprofitable products. Early improvements in profit margins are encouraging, but analysts are unsure if cutting costs alone can reverse the decline in demand.
Debt Restructuring
Fossil filed for Chapter 15, which lets the company enforce a restructuring plan in the UK that affects all its creditors. In August 2025, Fossil replaced its loan with JPMorgan with a $150 million asset-based loan from Ares Management Credit.
After setting aside money for rent, taxes, and pensions, only $101 million is left for discretionary use. Approximately 60% of bondholders have agreed to exchange their debt, but it remains unclear whether all will participate.
Seasonal Cash Crunch
Fossil’s business is very seasonal. During the holiday season from October to December, they earn 40% of their revenue. The company requires $58 million per month to cover payroll, rent, inventory, and compliance costs across 30 countries.
Their borrowing is linked to inventory, which limits their ability to borrow when stock levels are low. Without additional funding, management expects cash to drop to $56.5 million by September 2026, which is below the amount needed to operate.
Lost Ground
Fossil is facing challenges as fewer people are interested in traditional watches. Meanwhile, Apple and Samsung lead the wearables market because many consumers prefer smartwatches that offer both style and features.
In 2024, Fossil ceased production of smartwatches, resulting in a 600-basis-point decline in revenue and accelerating its decline. The market for traditional watches is shrinking as younger buyers choose smartphones or smartwatches instead.
Creditor Talks
Debt restructuring involves complex negotiations with key creditors, such as HG Vora Capital Management and Nantahala Capital. These “Consenting Noteholders” own about 60% of the company’s 7.00% Senior Notes, which are due in November 2026.
The company needs an additional $32.5 million in new financing to cover seasonal cash shortages. If this plan fails, Fossil could face liquidation, forcing creditors to sell off its assets immediately.
Going Concern Warning
If Fossil can’t finalize its restructuring by November 2025, management may issue a “going concern” warning in its Q3 filings, indicating serious doubts about its ability to survive the next year.
This could trigger severe consequences, including suppliers tightening credit, insurers pulling coverage, and a erosion of consumer trust—especially damaging before the holiday season. It could also jeopardize licensing deals and lead to staff turnover.
Analyst Doubts
Despite new leadership and restructuring efforts, analysts remain skeptical about Fossil’s long-term prospects in a tech-dominated landscape. The traditional watch market continues to shrink as smartwatches gain ground, creating challenges that cost cuts alone may not resolve.
The stock fell 40% in October 2025 after the company extended the deadline for its debt exchange. Many question whether a heritage brand can pivot fast enough to stay relevant.
An Uncertain Future
Can a legacy fashion brand like Fossil reinvent itself against tech giants with vast resources and global ecosystems?
Fossil must restructure its debt, cut $100 million in costs, and win back consumer confidence—all while competing with Apple and Samsung. Its survival depends on flawless execution in a market that’s already moved on.