AGI HoldCo, Inc., a multi-channel leading women's footwear brand doing business as Aerosoles, announced that it, along with certain of its subsidiaries have voluntarily filed petitions to reorganize under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company will continue to manage its stores and operate its businesses as "debtors in possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.
Denise Incandela, the company's Interim Chief Executive Officer, commented, "For nearly 30 years, Aerosoles has proudly offered consumers stylish and comfortable footwear at a great value. This restructuring will enable Aerosoles to become a stronger, more vibrant brand, and position the Company for future growth."
A critical portion of the Company's restructuring is a significant reduction in the number of retail stores it operates in an effort to realign the business with the changing marketplace environment. The company already had begun store closing sales and is seeking approval from the Bankruptcy Court to proceed with those sales. The company said it plans to close up to 74 retail outlets, and maintain four flagship stores in New York and New Jersey. Customers may also continue to shop online, as the company continues to enhance its strong digital platform, and at leading retailers throughout North America.
"Incandela added, "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. We will continue to create product that leads the market in comfort and fashion, grow our ecommerce, wholesale and international businesses, and promote innovative new marketing campaigns that will drive our business forward."
In connection with the bankruptcy filing, Aerosoles has filed with the Bankruptcy Court, and expects to obtain approval for, various customary motions for immediate relief. This immediate relief will allow the company to make certain necessary payments to employees and suppliers that will permit it to continue operating without interruption during the restructuring. The requested approvals include authority to make wage and salary payments, continue various benefits for employees, as well as honor certain customer programs, including gift cards and customer loyalty programs.
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.
"We sincerely appreciate the tremendous efforts of our employees and our partners as we work through the restructuring. We recognize that our success is dependent on the ongoing support of our employees and value the collective efforts of our field and corporate team members. We also appreciate the loyalty and support of our customers. This process will allow us to emerge as a stronger brand and company and reinforces our commitment to providing a superior shopping experience in stores and online," said Incandela.
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.