AGI HoldCo Inc. — the company doing business as women’s comfort shoe brand Aerosoles — today filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware.
The 30-year-old New Jersey-based company plans to continue to manage its stores and operate its businesses as “debtors in possession.” It expects to complete its restructuring in four months.
Aerosoles said a “significant reduction in the number of retail stores it operates” will be a “critical” component of its restructuring plan as it seeks to “realign the business with the changing marketplace environment.”
The company has already begun store-closing sales and is seeking approval from the court to proceed with them. Aerosoles said it plans to keep four flagship stores in New York and New Jersey, and will maintain a presence in other retail stores as well as online. According to its website, prior to its filing, Aerosoles had 88 retail stores and distribution in thousands of department and specialty store locations.
“This restructuring will enable Aerosoles to become a stronger, more vibrant brand, and position the company for future growth,” Denise Incandela, the company’s Interim CEO, said in a release. “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.”
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In connection with the bankruptcy filing, Aerosoles has filed — and expects to obtain approval for — various customary motions for immediate relief in order to pay employees and suppliers, and continue operating without interruption during the restructuring, the company said.
Aerosoles said its reorganized business will focus on e-commerce, wholesale and international businesses.
The brand joins a growing list of footwear and apparel firms that have flocked to the the bankruptcy courts at a time of intense digital disruption and consumer shifts in retail.
The company listed assets of $50 million to $100 million and liabilities of $100 million to $500 million in court documents.
Payless ShoeSource, The Limited, Wet Seal and BCBG are among the fashion firms to seek Chapter 11 protection this year alone. The Sports Authority, Aeropostale and Pacific Sunwear filed bankruptcy in 2016.