Canada-based footwear retailer and distributor Aldo Group has filed for creditor protection in order to restructure its business.
The Montreal-based company obtained an initial order under the Companies’ Creditors Arrangement Act (CCAA) from the Superior Court of Québec, and has voluntarily applied for similar protection in the US. It plans to do the same in Switzerland.
The initial order provides a “stay of proceedings” in favour of Aldo for an initial period of ten days, subject to extension thereafter. The company says it will work to complete its restructuring “in a timely fashion” and hopes to exit from the process “as soon as possible and better positioned for long-term growth.”
“Aldo is one of the world’s leading fashion footwear and accessory brands with a solid track record of growth and profitability for almost half a century,” says CEO David Bensadoun. “It is no secret that the retail industry has experienced rapid and significant change over the last several years. 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.
“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.”
Throughout the process, Aldo expects to carry on business while it develops and implements a comprehensive restructuring plan across the organisation. Aldo, Call It Spring and Globo’s e-commerce sites will also remain open throughout the process, while the company’s stores, which are temporarily closed due to Covid-19, will re-open based on the guidelines set by local governments and health authorities.
“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,” adds Bensadoun. “We will come out stronger and well-positioned to continue leading the way in fashion retail.”
Aldo is one of a number of retailers that have filed for bankruptcy protection in recent weeks due to a challenging market environment exacerbated by the Covid-19 pandemic.