After several consecutive quarters of negative shareholders’ equity and declining sales, Bakers Footwear Group Inc. filed for Chapter 11 bankruptcy protection on Wednesday in the U.S. Bankruptcy Court for the Eastern District of Missouri.
The St. Louis-based retailer said in court documents that weak sales and prior losses resulted in the company’s defaulting on its senior credit facility, and the firm is asking the court to approve as much as $22 million in financing from Crystal Financial LLC, including $6 million on an interim basis, to operate while in bankruptcy.
Bakers’ largest unsecured creditors include Taiwan-based East Mount Shoes Ltd., with a claim of $6.9 million; Steven Madden Ltd., with a claim of $3.7 million; and H Co. IP LLC, based in Los Angeles, with a claim of $2.5 million. Madden had in 2010 made a $5 million debt investment in Bakers for a 20 percent equity stake in the company.
Other debtors include landlords such as Simon Property Group, General Growth Properties Inc. and Westfield LLC.
Bakers also said it plans to proceed with its previously disclosed plans to sell as many as 52 leases to Aldo U.S. Inc., close other stores and liquidate inventory from its shuttered locations.
Bakers operates 215 stores in 34 states. For the fiscal quarter ended July 28, the firm’s revenue fell 11 percent from the same period a year ago, with same-store sales down 7.5 percent.
Shares plunged to 6 cents in late-afternoon trading Wednesday on the over-the-counter market, from 50 cents.