The pruning phase of retail’s evolution is far from over.
Roughly three years have elapsed since a now-familiar list of challenges started sinking big names such as The Sports Authority, The Limited and Wet Seal.
Now — even as more brands and retailers smarten up and implement more effective strategies for digital times — those same issues continue to wreak havoc.
And despite showing some resistance at the start of retail’s so-called apocalypse, shoe brands are now feeling the burn, too. (Experts have noted that while footwear continues to demonstrate some level of immunity amid tough times — people in Western cultures are not likely to go barefoot — a huge characteristic of footwear requires proper fit, which has made it tough for the industry to move online.)
Here, three companies that have gone bankrupt this year and several reasons why.
The shoe drop heard around the world: Filing for bankruptcy last week, Nine West Holdings Inc. said it plans to sell off its namesake footwear brand as well as Bandolino. (The company has entered into a “stalking horse” asset purchase agreement with Authentic Brands Group for the purchase of Nine West and Bandolino and is subject to a competitive sale process.)
Saddled with a reported $1.5 billion in debt — much of which stemmed from a private equity buyout — Nine West Holdings said the primary purpose behind its Chapter 11 filing was to facilitate the sale of its footwear and handbag businesses and to adjust its capital structure around its “profitable and growing businesses,” including One Jeanswear Group, The Jewelry Group, the Kasper Group and Anne Klein.
The Walking Co.
The comfort footwear maker took its financial woes to bankruptcy court for the second time in 10 years in March, evidencing that despite taking the Chapter 11 route in 2009, its struggles linger on.
In its declaration — in the most recent bankruptcy filing — president and CEO Andrew Feshbach addressed the company’s struggle to develop its brand between 2013 and 2017 amid the consumer shift to online spending: “The increasing power of internet retailers made the traditional business of retail stores selling products manufactured by others increasingly difficult, and it also had an increasingly negative impact on customer traffic in shopping malls,” he said.
Feshbach also attributed the bankruptcy to the decision by its largest footwear vendor, Deckers Outdoor Corp., to end its relationship with the company and pull Uggs from store shelves at the end of 2016.
A decade after British designer Charlotte Dellal launched her whimsical footwear label Charlotte Olympia, the company said in February that would be closing up shop in the U.S.
Pinktoe Tarantula Ltd. and affiliates Desert Blonde Tarantula Ltd. and Red Pump Tarantula Ltd. — doing business as Charlotte Olympia — filed a Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware.
In a declaration filed with the courts, chief restructuring officer William Kaye said Charlotte Olympia’s U.S. retail outposts — consisting of four locations in New York, California and Nevada — had historically been unprofitable. (Previously, the company operated a store in Bal Harbour, Fla., that was closed in 2017.)
“The brick-and-mortar retail environment has been experiencing, and continues to experience, unprecedented disruption due to a confluence of factors, including the proliferation of online retailers, changing consumer tastes and demographics, and increased competition,” Kaye stated in the filing. “Despite selling the iconic Charlotte Olympia brand and taking steps to reduce their expenditures, the debtors’ operations are not profitable due to the widespread disruption in the retail industry.”
A spokesperson for the brand later told FN that despite shuttering its retail stores in the U.S., Charlotte Olympia’s wholesale business remains intact.
Charlotte Olympia U.S. stores had employed 21 people.