Aerosoles, leading women’s footwear brand, and other subsidiaries of parent company AGI HoldCo Inc. filed to reorganize under chapter 11 of the U.S. Bankruptcy Code.
A critical portion of the company’s restructuring is a significant reduction in the number of retail stores it operates.
Aerosoles operates 78 retail locations in 20 states, principally in lease-based mall locations, lifestyle centers, street locations and outlet centers. It plans to close 74 of them.
The company plans to maintain four flagship stores in New York and New Jersey.
The Edison, NJ-based company has already begun planning store closing sales and is seeking approval from the Bankruptcy Court to proceed with those sales.
The company’s troubles began in April 2016, when it sole product sourcing agent in Asia immediately stopped providing services. While the company worked quickly to find a new sourcing agent, it lost customers across all of the affected business lines due to lack of inventory, quality control issues and delays in product shipment, the company said in its bankruptcy filing.
These issues continued through the fall 2016 and spring 2017. During that time frame Aerosoles closed 30 other locations.
“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,” said Denise Incandela, the company’s interim CEO.
The company expects to complete the restructuring within approximately four months. The reorganized business will focus its efforts on the ecommerce, wholesale and international businesses that have continued to gain strength in recent years.
Aerosoles’ legal advisor in connection with the restructuring is Ropes & Gray LLP. Berkeley Research Group LLC serves as its restructuring advisor and Piper Jaffray & Co. serves as its investment banker for the restructuring. Hilco Merchant Resources is assisting on store closings.