How 4 Shoe Companies Went Bankrupt and Stayed in Business

Bankruptcy doesn’t have to mean goodbye.

Amid a retail climate that’s seen dozens of major players file for Chapter 11 protection in recent years, several shoe companies have either successfully reorganized their business or found a buyer after going bankrupt, proving that brands can survive even dire financial straits. Here are four ways footwear companies have weathered the storm.

The Newton, Mass.-based comfort-shoe stalwart just announced that it will sell substantially all of its assets to Charlesbank Capital Partners LLC, a private equity buyout firm, for $150 million. The company filed for Chapter 11 protection in May with $287 million in debt, obligations that the sale is expected to help alleviate. The Rockport Group LLC’s brands include Aravon, Rockport and Dunham, which together are sold in 60 countries worldwide. Its wholesale, independent and e-commerce businesses, along with retail stores in Asia and Europe, will be transferred to Charlesbank, but in the meantime, the company wants to assure customers that they shouldn’t see any disruption from the outside. “We do not expect the availability of Rockport shoes to be affected anywhere in the marketplace,” reads a message on its website. “We are as committed as ever to delivering the same great products you know and love.”

The Walking Co.
For the second time in 10 years, this California-based footwear chain filed for bankruptcy in March, citing increased competition from online retailers and the loss of a major vendor. Four months later, it’s successfully secured an additional $10.2 million in investment from existing shareholders, as well as an exit financing package from Wells Fargo Bank, which together have given it enough support to emerge from the process. The Walking Company Holdings Inc. operates approximately 200 stores around the country, mostly in premium malls, and has two subsidiaries, also named in the filing: Big Dog USA Inc. and FootSmart Inc. “The reorganization has positioned our company for long-term success,” said CEO Andrew Feshbach. “We are excited to now focus on all of our growth initiatives for The Walking Co. and Abeo footwear brand.”

Alden Global Capital put in the winning bid of $26.2 million for Aerogroup International Inc. (doing business as Aerosoles) in a February bankruptcy auction. When it first filed for bankruptcy in September, the 30-year-old shoe company said it planned to restructure the business to “realign the business with the changing marketplace environment,” largely by closing many of its then-88 retail stores. At the time, it reported assets of $10 million to $50 million and liabilities of $100 million to $500 million.

Payless ShoeSource
The footwear world’s biggest turnaround story of 2017, Payless clawed its way back from bankruptcy in a matter of months, closing an estimated 673 stores and sloughing off some of its $840 million in debt, much of which originated from a 2012 leveraged buyout by private equity firms Blum Capital and Golden Gate Capital. Today, the company operates around 3,500 locations worldwide and is led by an executive committee following the retirement of then-CEO Paul Jones. “We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders and achieve long-term success,” Jones said in a statement last year.

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