Canadian footwear giant ALDO files for bankruptcy protection
ALDO has filed for bankruptcy. The Montreal shoe brand-turned-international retail juggernaut says it has filed for creditor protection while it "develops and implements a comprehensive restructuring plan across the organization" in an effort to save itself.
The ALDO Group Inc. announced Thursday afternoon that it had succesfully obtained an order from the Superior Court of Québec to protect its assets against creditors under the federal government's Companies' Creditors Arrangement Act.
Similar bankruptcy protection applications (not to be confused with bankruptcy filings) are being prepared in the U.S. and Switzerland, according to the company, which operates roughly 3,000 stores across more than 100 countries around the world.
ALDO, which was founded in Montreal as a shop-within-a-shop for footwear at Le Chateau stores circa 1972, said in a press release on Thursday that it has been struggling as of late due to challenges posed by the global pandemic.
NEW: The Aldo shoe empire files for bankruptcy protection - using almost identical wording as Neiman Marcus did earlier today:— Jeannie Lee@CBC (@JeannieLee88) May 7, 2020
"We were making strong progress...however, the COVID-19 pandemic has put too much pressure on our business..."#RetailIsHardhttps://t.co/u0JVPe6ZpX pic.twitter.com/2ebzMHlmEt
The initial protection order will be effective for 10 days with future extensions possible, though the company said it "intends to
complete its restructuring in a timely fashion and hopes to exit from the process as soon as possible."
ALDO and its sister brands Call It Spring and GLOBO will remain open for online sales via their websites throughout the restructuring process. Retail stores will open as they're peritted to by local public health authorities.
"It is no secret that the retail industry has experienced rapid and significant change over the last several years," said company CEO David Bensadoun when announcing the news.
"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 continued.
"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."
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