Shoe Pavilion Files for Bankruptcy

July 21, 2008
SGB Update

On July 15, Shoe Pavilion, Inc. voluntarily filed for bankruptcy protection. According to its court filing at the U.S. Bankruptcy Court for the Central District of California-San Fernando Valley Division, the Sherman Oaks, CA-based off-price retailer had $61 million in assets and between $25 million and $27 million in liabilities.


The company and its subsidiary will continue to operate their businesses as “debtors-in-possession” under court jurisdiction. Court documents have not yet provided a reason for the filing or plans during bankruptcy. Unsecured creditors included New Balance, who was due $324,203, and Asics America, who is due $196,166.


As of March, Shoe Pavilion had 113 stores in Western and Southwestern United States, including California, Oregon and Washington.


In the first quarter ended March 29, Shoe Pavilion suffered a loss of $6.3 million against a loss of $1.2 million a year ago. Sales were down 8.5% to $32.5 million from $35.6 million. Gross margins during the quarter decreased to 17% from 28.8%, primarily due to lower selling margins of 8.6% and higher occupancy expenses of 4.9%, primarily related to new stores. SG&A increased to 35% of sales from 33.4%

primarily due to an increase of 1.7% in store salaries.


In 2007, Shoe Pavilion lost $16.3 million against a deficit of $18.2 million a year earlier. Revenues climbed to $152.6 million from $129.1 million due to the opening of 15 stores.

Shoe Pavilion Files for Bankruptcy

July 16, 2008
SGB Executive
by

Shoe Pavilion Inc. voluntarily filed for bankruptcy protection. According to its court filing at the U.S. Bankruptcy Court for the Central District of California-San Fernando Valley Division, the Sherman Oaks, CA-based off-pricer had $61 million in assets and between $25 million to $27 million in liabilities. Vendors included on the unsecured creditors list included New Balance, Asics and Adidas.


The company and its subsidiary will continue to operate their businesses as “debtors-in-possession” under court jurisdiction. Court documents have not yet provided a reason for the filing or plans during bankruptcy.


 


As of March, Shoe Pavilion had 113 stores in Western and Southwestern United States, including California, Oregon and Washington. Stores are located primarily in strip malls and outlet centers.


 


In the first quarter ended March 29, Shoe Pavilion suffered a loss of $6.3 million against a loss of $1.2 million a year ago. Sales were down 8.5% to $32.5 million from $35.6 million. The sales decline stemmed from a tumble in comparable store sales of 16.5%, primarily due to the difficult retail environment, offset by the addition of 18 new stores.


 


Gross margins during the quarter decreased to 17% from 28.8%, primarily due to lower selling margins of 8.6% and higher occupancy expenses of 4.9%, primarily related to new stores. SG&A increased to 35% of sales 33.4% primarily due to an increase of 1.7% in store salaries.


 


In 2007, Shoe Pavilion lost $16.3 million against a deficit of $18.2 million a year earlier. Revenues climbed to $152.6 million from $129.1 million due to the opening of 15 stores.


According to the bankruptcy filing, the top 20 unsecured creditors were:


1) Gilbert West Inc., Los Angeles, $456,001
2) New Balance, $324,302;
3) Bordan Shoe Co., $309,562;
4) Ad Marketing, Los Angeles, $253,046
5) Asics America, $196,166
6) Bozzolo Inc., $193,166
7) Grant Thornton, $161,217
8) Meynard Trading, Walham, MA, $161,040;
9) Arthur Gallagher, Glendale, CA, $142,732
10) AD Art Inc., $131,889
11) Adidas, $128,514
12) 121 Retail Venures, Beverly Hills, $127,272
13) Ellis Contracting, San Diego, $125,063
14) Clarks of England, $120,700;
15) Carrini, Edison, NJ, $120,360
16) Reebok, $117,583
17) Diesel USA, $111,212
18) Keds Corp., $100,165;
19) Blue Cross of California, $97,726
20) Naturalizer (Brown Shoe), $95,310
 


 


 

Share This