6 Shoe Companies That Have Gone Bankrupt in the Past Year — & How They’re Faring Now

Samantha McDonald

25 April 2019 at 2:31 am

The past few years have not been kind to many retailers, including those in the shoe industry.

Despite showing resistance in the early stages of the so-called retail apocalypse, a number of notable footwear businesses eventually proved to be susceptible to tougher times — with the rise of e-commerce, shifting consumer tastes and increased competition all contributing to the downfall of some of the industry’s most storied names.

Charlotte Olympia

Filed for bankruptcy: February 2018

What happened: Pinktoe Tarantula Ltd. as well as affiliates Desert Blonde Tarantula Ltd. and Red Pump Tarantula Ltd. — doing business as Charlotte Olympia — filed a Chapter 11 petition that estimated the value of their assets at $3.26 million, with liabilities of $19.2 million. Citing “unprecedented disruption due to a confluence of factors,” the companies secured $410,000 in debtor-in-possession financing from Three14 Ltd. to support their operations and liquidation costs. (In July 2017, Onward Luxury Group signed a strategic partnership with the brand, acquiring a controlling stake for an undisclosed sum.)

Where are they now: The bankruptcy, which occurred a decade after British designer Charlotte Dellal launched her whimsical label, led to the closing of all four of its stores in the United States and impacted the jobs of 21 people employed at those locations. In addition to liquidation sales, the footwear and accessories retailer held a weeklong sample sale in a New York showroom the following month, seeking to get rid of inventory from previous seasons. Its wholesale business remains intact. Moreover, president and CEO Bonnie Takhar resigned from her post after seven years with the brand.

Nine West

Filed for bankruptcy: April 2018

What happened: Nine West Holdings Inc. — owner of Nine West, Anne Klein, Gloria Vanderbilt and other labels — sought Chapter 11 protection after closing all of its 71 standalone stores. While it managed to trim its pre-bankruptcy debt obligations by more than $1 billion, the company sold its Nine West and Bandolino shoe and accessory businesses to Authentic Brands Group for $340 million in a court auction in June.

Where are they now: Just short of a year later, the company emerged from bankruptcy with a new name. Premier Brands Group Holdings LLC maintains liquidity of more than $100 million to support its operations and future growth initiatives. Its remaining brands include Anne Klein, One Jeanswear Group, The Jewelry Group and Kasper Group. On the other hand, ABG — owner and licensor of Frye, Juicy Couture and more — now assumes all licensing partnerships and marketing initiatives for the Nine West and Bandolino brands. It appointed Marc Fisher Footwear — launched by Marc Fisher, son of Nine West co-founder, the late Jerome Fisher — to run both brands’ shoe business.

Payless ShoeSource

Filed for bankruptcy: February 2019 (Payless first filed for bankruptcy in April 2017)

What happened: Two years ago, the specialty family footwear retailer shut down nearly 400 underperforming stores in the U.S. and Puerto Rico. It got a new lease on life in August 2017 when Payless managed to restructure its debt load and saw the retirement of CEO Paul Jones. However, early this year, the 60-year-old chain confirmed a second round of bankruptcy proceedings, effectively closing its 2,300 brick-and-mortar locations as well as its e-commerce site.

Where are they now: Payless is in the process of liquidating all 2,500 of its North American stores but continues to operate its 420 locations across 20 countries in Latin America. (The company prioritized Hispanic consumers as part of its 2017 post-bankruptcy restructuring plan.) It also maintains 370 international franchisee locations in 16 countries including Asia and Africa. Its demise was expected to cost about 16,000 jobs, with collateral damage to other shoe players like longtime private footwear-maker Steve Madden.

Rockport

Filed for bankruptcy: May 2018

What happened: The Newton, Mass.-based company — home to the Aravon, Dunham, Rockport and Cobb Hill collections — cited heavy competition, underperforming stores and supply chain interruption among the factors that led it to bankruptcy court. Two months later, its stalking-horse bidder, private equity firm Charlesbank Capital Partners LLC, snapped up The Rockport Co. LLC, including its global wholesale assets, e-commerce platform and retail operations in Asia and Europe.

Where are they now: According to court documents filed on June 28, Adidas — owner of Rockport until 2015 — objected to its proposed bankruptcy sale, alleging that the transaction would shortchange it by millions. The footwear business reached a settlement with the sportswear giant in late July, with the latter saying it was owed about $54 million, yet stood to collect only $8 million. (Rockport said it would pay Adidas the sum from the proceeds of the bankruptcy sale.) In October, still fresh out of bankruptcy, Rockport bought the Reef brand from Greensboro, N.C.-based VF Corp. At that point, it boasted a new CEO: footwear industry veteran and former Crocs chief Gregg Ribbatt.

Shoes of Prey

Filed for bankruptcy: Shoes of Prey collapsed into liquidation in March 2019 — about seven months after it revealed that it was putting its business on hold amid faltering sales.

What happened: A blog post penned by co-founder Michael Fox, who ran the company with wife Jodie, described a “decision paralysis” among modern-day shoppers that ultimately contributed to the Australian footwear startup’s undoing. “We learned the hard way that mass-market customers don’t want to create,” he wrote, “they want to be inspired and shown what to wear.” The company cited high fixed costs due to its niche retail model and personalized offerings, which it struggled to meet while considering the environmental and labor regulations at its Chinese factories.

Where are they now: Last March, the 10-year-old digitally native brand received a multimillion-dollar funding injection from Blue Sky Alternative Investments and Greycroft Partners. But just five months later, Shoes of Prey announced that it would cease taking orders. It laid off its staff, which expanded to about 200 members at its peak. FTI Consulting’s Kelly Trenfield and John Park were appointed as liquidators early last month. Co-founder Jodie Fox is also expected to release a book about the Shoes of Prey journey this year.

The Walking Co.

Filed for bankruptcy: March 2018 (The Walking Co. first filed for bankruptcy in 2009)

What happened: Within the span of a decade, The Walking Co. Holdings Inc. filed for Chapter 11 bankruptcy protection twice. The second, which included The Walking Co., Big Dog USA and FootSmart Inc., listed the estimated value of its assets between $100 million and $500 million, with total estimated liabilities at $50 million to $100 million. Li & Fung Ltd. and Dansko Inc. were among the creditors cited, with the company owing the Hong Kong trading conglomerate $5.2 million and the comfort brand $1.5 million.

Where are they now: In the court declaration, president and CEO Andrew Feshbach attributed the bankruptcy to The Walking Co.’s struggle to develop its brand amid the consumer shift to e-commerce. It also lamented the decision by its largest footwear vendor, Deckers Outdoor Corp., to end their relationship and pull Uggs from store shelves at the end of 2016. However, the company managed to secure $10 million in equity commitments and $50 million in financing, successfully emerging from its restructuring process at the end of June.

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