Add women’s footwear retailer Aerosoles to the list of mall-based retailers unable to stay above water as the market shifted.
The 30-year-old comfort footwear brand, which operates about 80 retail locations mainly in U.S. malls and sells with a number of retail partners, filed for Chapter 11 in Delaware bankruptcy court under its formal name AGI HoldCo Inc. on Friday.
“This restructuring will enable Aerosoles to become a stronger, more vibrant brand and position the company for future growth,” said interim chief executive officer Denise Incandela.
The filing will allow the company to complete a “significant reduction” in its retail store operation as part of a broader effort to “realign the business with the changing marketplace environment.”
At least some Aerosoles stores have already begun store closing sales, the company said. As of now, its flagships in New York and New Jersey are slated to stay open and the web site will remain operational.
Incandela said that “by improving our financial structure and right-sizing our retail footprint, we will be able to refocus our business efforts on the execution of our turnaround strategy.” She also alluded to the brand being much more focused on e-commerce and wholesale, including through international stores, going forward.
The restructuring is expected to take about four months, the company said.
It’s biggest shareholder is private equity firm Paladin Partners LP.
A number of private equity-backed retailers have struggled with being over leveraged and eventually forced to file bankruptcy, including The Limited, Rue 21 and others.
In its initial bankruptcy filing, Aerosoles estimated its assets to be between $10 million and $50 million and its debts to be between $100 million to $500 million.
It’s largest creditors are mainly manufacturers and distributors, like ICB Asia Co. Ltd., which is owed $7.5 million in trade debt, and Rival Shoes Design Ltd., which is owed $1.8 million.
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