Aerosoles Files for Chapter 11 Bankruptcy Protection
AGI HoldCo, Inc., a multichannel women's footwear brand doing business as Aerosoles, filed for Chapter 11 bankruptcy protection on Friday with a plan to close 95 percent of its 78 stores and focus on its wholesale, e-commerce and international businesses. Aerosoles blamed its bankruptcy on declining mall traffic, significant industrywide price markdowns and a shift toward online shopping, according to a court filing.
"This restructuring will enable Aerosoles to become a stronger, more vibrant brand, and position the company for future growth," interim Chief Executive Officer Denise Incandela said in a statement. The company said it expects to complete the Chapter 11 restructuring, which could include a sale to a third party, within about four months.
Total Retail’s Take: Unfortunately in today’s retail climate, the Aerosoles news isn't surprising. 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 companies such as Amazon.com. Aerosoles, once part of storied shoe company Kenneth Cole, said in its court filing that it rejected two proposals from potential investors before the bankruptcy filing, but remained in talks over a possible deal. Private-equity fund Palladin Partners has owned a majority stake in the retailer since 2014.