Even before the major struggle that continues to be COVID-19, many brands and retailers were experiencing hardship in the retail world. One brand that is, unfortunately, having a rough go is Canadian footwear and accessories brand ALDO.
It’s just been announced that the brand has filed for and obtained creditor protection which means that the company has at least 10 days to restructure and come up with a plan.
“ALDO is one of the world’s leading fashion footwear and accessory brands with a solid track record of growth and profitability for almost half a century. It is no secret that the retail industry has experienced rapid and significant change over the last several years. 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. 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,” says David Bensadoun, Chief Executive Officer of the Company, in a release.
According to CBC, none of the company’s U.S or Canadian stores paid rent in April or May, and its filings suggest it’ll run out of money by June.
While ALDO sold just over $1.2 billion worth of merchandise in the past 12 months up until February, it ended up losing money — $74.8 million at Canadian stores, and about $52.8 million in the U.S.
However, now that non-essential businesses are allowed to reopen soon in Ontario, ALDO locations that have street entrances will be opening their doors in accordance with public health regulations. With that being said, the brand’s filings reveal that not all of its 850 North American stores will reopen and will be closed for good.
Have an ALDO gift card that you’re looking to use? CBC also reports that the brand is asking courts for permission to honour customer gift cards during the restructuring process.
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