Debt, tariffs and smartwatch collapse force Fossil into survival mode
Fossil’s long struggle to stay relevant in a changing watch market has reached a breaking point. The company has now filed for financial restructuring in both the U.K. and the U.S., with filings revealing the scale of its recent decline and the terms of its rescue plan.
The move comes under Chapter 15 in the U.S. Bankruptcy Court for the Southern District of Texas, a process that recognises the U.K. as the primary venue for restructuring. Fossil (UK) Global Services Ltd. is the entity leading the case, with the petition officially filed on October 20, 2025. The company’s goal is to gain protection from creditors while reorganising operations and debt tied to falling sales and tariff pressure.
Fossil’s plan to stay afloat
Documents submitted to court outline how Fossil intends to stabilise its finances. A key element is a new 150 million dollar asset-based revolving credit facility, created in August 2025 to replace an earlier JPMorgan arrangement. Alongside that, Fossil plans a 32.5 million dollar injection of fresh capital, labelled “New Money,” to sustain liquidity during the turnaround.
The filings show the business needs a minimum cash balance of around 58 million dollars per month to keep operations running. Without the new financing, its cash reserves could drop below that safe level to about 56.5 million dollars by September 2026, meaning the company would start running too close to the edge.
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Company Chief Financial Officer Randy Greben’s declaration highlights the impact of U.S. tariffs on imports from China. Most Fossil products are made in Asia, and the extra costs have squeezed margins by around 80 basis points. Fossil says it tried to offset this through higher prices and shifting production, but with limited success.
From smartwatch dreams to debt reality
Fossil’s troubles began long before the current restructuring. In 2015 it acquired Misfit, aiming to bridge traditional watchmaking with wearable tech. By 2017, the company had ambitious plans to release up to 300 connected models under brands like Armani Exchange, Skagen, and Adidas. The effort burned through cash but didn’t deliver lasting growth.
Since then, Fossil had fully exited the smartwatch business – citing poor returns and market dominance by Apple and Samsung. The shift left it with excess inventory, closed stores, and a steep revenue decline. In 2022 the group posted sales of 1.7 billion dollars and a 44 million dollar loss. By 2024, sales had dropped to 1.1 billion dollars and losses deepened to 101 million dollars.
The broader watch industry has also changed. Low-cost fashion watches have struggled as consumers lean either toward luxury mechanical models or feature-rich smartwatches. Fossil’s mid-range positioning has left it squeezed between those segments.
Why the UK route matters
Fossil’s decision to file primarily in the U.K. has raised eyebrows. The Financial Times and legal analysts suggest the company is “venue shopping.” U.K. courts, under Part 26A of the Companies Act, can sometimes grant more flexibility in how equity and debt are treated during restructuring. Unlike the U.S., they are not bound by the absolute priority rule, which restricts shareholder value retention when creditors are unpaid.
The convening hearing for the U.K. process took place on October 15, with a sanction hearing expected in November. The Chapter 15 filing in Texas ensures that any U.S. creditors must recognise the U.K. court’s decisions.
What happens next
Fossil operates 214 stores globally and employs about 4,500 people. It owns Zodiac and Swiss Technology Production (STP), which make mechanical watches and movements in Switzerland. Both are expected to continue trading while the parent company restructures.
If the plan succeeds, Fossil may emerge smaller but financially stable. If it fails, liquidation or asset sales are the likely outcomes. The company’s shares, now worth around 112 million dollars compared to 2.7 billion at their peak, show how far it has fallen from its days as a dominant watchmaker.
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