The Walking Company Holdings, Inc. filed for voluntary Chapter 11 Bankruptcy protection in Santa Barbara, CA. The 210-store comfort shoe chain said it is seeking to shed its unprofitable stores and emerge from Chapter 11 in early 2010.
The company said that in early in 2009, it implemented a major restructuring in order to try to survive the difficult retail environment. At the time, the company shuttered and then finally sold its Big Dogs clothing chain in March to focus on footwear.
However, as a result of rapidly expanding its store chain between 2005 and 2008, the vast majority of the lease rents for The Walking Company's stores are now at or above the market rates for malls across the United States. While the restructuring was successful on most fronts, The Walking Company was largely unsuccessful getting its landlords to adjust the occupancy costs under its leases.
The company said the filing for Chapter 11 will allow the company to shed its unprofitable stores and emerge financially strong and able to weather this tough retail cycle. The Walking Company plans to file its plan of reorganization within the next few weeks.
“This action is an unfortunate but necessary and responsible step to preserve The Walking Company's value for its secured creditors, vendors, landlords, additional creditors and employees in light of the ongoing challenging retail environment,” said Andrew Feshbach, CEO of The Walking Company.
The company was once traded on the Nasdaq. But with fewer than 100 shareholders and a low market capitalization, the company decided it could save money by withdrawing from the exchange in April. At Sept. 30, 2008 ï¿½ the last time the company reported financial information ï¿½ The Walking Co. had lost $9.7 million for the year.
The company's Chapter 11 counsel is Arent Fox LLP and the Company's financial advisor is Clear Thinking Group LLC.