Aerosoles files for bankruptcy

Women’s shoe retailer Aerosoles Group has filed for Chapter 11 bankruptcy protection and reorganization, making it the latest casualty in a struggling retail industry.

FashionNetwork.com first reported on Aerosoles' woes in July when the company began considering bankruptcy. An official petition was filed today in the U.S. Bankruptcy Court for the District of Delaware. According to the filing, the company has listed assets of $10 million to $50 million and liabilities of $100 million to $500 million.

Aerosoles’ holding company AGI HoldCo Inc said it would continue to manage its stores and operate its businesses as “debtors in possession”.

The company said it would significantly reduce the number of stores as part of the restructuring in an effort to realign the business with the changing marketplace environment. It plans to close up to 74 stores in its existing network.

Liquidation sales have begun at the stores that will be closing. Aerosoles plans to keep four flagship stores located in New York and New Jersey.

At least a dozen retailers selling apparel, electronics and discount shoes have filed for bankruptcy this year to slash their store count and better compete with e-commerce giants such as Amazon.com Inc.

Denise Incandela, Aerosole's Interim Chief Executive Officer, made comments in the company's official bankruptcy announcement that sounded very similar to those made from other struggling retailers.

Incandela said, "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."

Aerosoles will specifically focus on ecommerce, wholesale and growing the business globally. It will also make a push for more innovative marketing campaigns that help drive the business ahead. Aerosoles currently has more than 300 stores around the world including in China, India and Peru.

One benefit of filing for bankruptcy is that the company will get immediate relief from debts. The relief will allow it to continue to be able to pay certain employee benefits as well as wages. It will also be able to continue honoring customer loyalty programs and gift cards as it is financially reorganized.

Aerosoles expects it will emerge from bankruptcy in four months.

Cassidy Mantor with reporting from Reuters

Aerosoles files for bankruptcy

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