By Aisha Al-Muslim

Branded-apparel maker Centric Brands Inc. became the latest clothing company to go bankrupt due to the coronavirus pandemic, filing for chapter 11 protection with plans to go private and preserve some of Blackstone Group Inc.'s ownership stake.

The New York-based company filed for chapter 11 protection Monday in the U.S. Bankruptcy Court in White Plains, N.Y. Centric designs and manufactures apparel under licensing agreements from brands including Tommy Hilfiger, Calvin Klein and Kate Spade for retail customers such as Walmart Inc. and Macy's Inc.

Last month, WSJ Pro Bankruptcy reported that Centric had engaged financial advisers PJT Partners Inc. and Alvarez & Marsal to hammer out a restructuring agreement with creditors.

The brands collective filed for bankruptcy after reaching a restructuring proposal that would cut debt by about $700 million. The company listed its total debt at about $1.7 billion, according to court papers.

Centric expects to emerge from bankruptcy as a private company under the ownership of lenders. As part of the agreement, Blackstone, HPS Investment Partners LLC and Ares Management Corp. would own stakes in the restructured company. Blackstone is Centric's largest current shareholder, with its affiliates owning more than 40% of the company.

The apparel maker filed for bankruptcy after the Covid-19 pandemic pressured its operations and finances. Its cash flow was constrained and its supply chain disrupted while production and distribution partners began demanding cash due to government-mandated store closures, according to a sworn declaration filed by Chief Financial Officer Anurup Pruthi.

The company furloughed about 1,350 employees and laid off about 660 employees last month to offset expenses.

Besides licensing brands, Centric also sells its own brands, including Hudson, Robert Graham, Swims, Zac Posen and Avirex. It temporarily closed all of its stores in the U.S. in March.

Centric's lenders are providing up to $435 million in bankruptcy financing to supply liquidity until the company can emerge from chapter 11.

The clothing company has requested a temporary halt on trading in its debt claims and equity securities, hoping to preserve $65 million in net operating losses, which are potentially valuable tax assets.

Centric designs and manufactures kids', men's and women's apparel and accessories. The company licenses more than 100 brands, including Nautica, Under Armour, Michael Kors, Timberland, Disney, Marvel and Nickelodeon.

The company sells products online and through retailers including J.C. Penney Co., Target Corp., Costco Wholesale Corp. and Amazon.com Inc.

Following the bankruptcy filing, Neuberger Berman Group LLC-backed licensing platform Marquee Brands LLC said Monday that it would take back the BCBGMaxAzria and BCBGeneration licenses from Centric and would continue operating the brands' wholesale and e-commerce business.

Some of Centric's customers and suppliers themselves are facing financial difficulties, with some on the brink of bankruptcy. Store closures have eaten into net sales from Centric's retail and wholesale business, fueling a projected loss of net sales of more than $700 million for fiscal year 2020, said Centric's chief restructuring officer, Joseph J. Sciametta of Alvarez & Marsal.

Centric's customer J.C. Penney filed for bankruptcy Friday. Other clothing retailers that filed for bankruptcy this month include Neiman Marcus Group Inc., J.Crew Group Inc. and Stage Stores Inc.

Founded in 1987, Centric has changed its corporate name several times, most recently in October 2018 after the acquisition of a portion of the North American licensing business of Global Brands Group Holding Ltd. for about $1.2 billion. This past November, Centric acquired the high-end Zac Posen brand.

The company has hired law firms Ropes & Gray LLP and Dechert LLP in addition to investment bank PJT Partners and restructuring-advisory-services firm Alvarez & Marsal.

Judge Sean H. Lane has been assigned the case, number 20-22637.

--Matt Grossman contributed to this article.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com