There is troubling news this morning coming from the Betsey Johnson camp with reports that the company which owns Betsey Johnson boutiques has filed for bankruptcy. As a result a majority of the designer's stores will be forced to close and around 350 employees are expected to lose their jobs.

The company released a statement yesterday saying "the decision to seek protection under Chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC's cash-flow problems. After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming. Accordingly, our board made the determination that a Chapter 11 store-closing process will likely be the best way to maximize the value of the company's assets, for the benefit of its creditors."

Despite the upheaval, Betsey herself will remain on as creative director and will now focus on her lower-priced label sold throughout Macy's and other department stores. "I feel so sad for my store people and all my pink girls. They live and die for me. But I need to be better. I really need to work well and be more efficient," said the designer.

Going forward the company has been quick to reassure buyers that there will be no interruption to wholesale deliveries, nor to the label's e-commerce infrastructure. The company now plans to operate four or five Betsey Johnson flagship-style stores across New York, Los Angeles and other major cities. Johnson will also start filming a new reality TV show, 'Betsy + Lulu' in July and she will soon roll out a second fragrance.

By all accounts this ship ain't about to sink and thank goodness for that!