Montreal-based Aldo filed its bankruptcy case under the Companies’ Creditors Arrangement Act in the Superior Court of Québec. It has filed a Chapter 15 petition in a U.S. bankruptcy court and will do the same in Switzerland, the footwear giant said Thursday.
“The company intends to use the proceedings to stabilize the business and build on its legacy in retail fashion,” it added.
CEO David Bensadoun pointed to Aldo’s “solid track record of growth and profitability for almost half a century” and noted the “rapid and significant change” that has upended retail in recent years. The outbreak’s timing, he said, stymied meaningful change on a turnaround journey.
“We were making strong progress with the transformation of our business to tackle these challenges; however, the impact of the COVID-19 pandemic has put too much pressure on our business and our cash flows,” he said. “After conducting an exhaustive review of strategic alternatives, we determined that filing under CCAA and related proceedings is in Aldo’s best interest to preserve the company for the long term and survive through this challenging period.”
The company will continue to operate its Aldo, Call It Spring and Globo online platforms throughout the restructuring process, while physical stores will re-open when feasible.
“Throughout the process, Aldo expects to carry on business while it develops and implements a comprehensive restructuring plan across the organization. With our deep fashion footwear heritage, experienced leadership team, extensive omnichannel capabilities and loyal customer base, we firmly believe that we will emerge from the restructuring process and from the challenges posed by the COVID-19 pandemic. We will come out stronger and well-positioned to continue leading the way in retail fashion,” Bensadoun said.
Aldo has 8,000 employees on payroll and manages a chain of about 700 stores. Through company-owned stores and franchises, Aldo’s retail presence includes more than 3,000 points of sale globally in over 100 countries, according to Ernst & Young, one of its restructuring advisors.