The Walking Company Holdings, Inc. filed a bankruptcy reorganization plan which enables the comfort shoe retailer to keep 207 of its 214 (over 96%) current store locations open and pay off all its debts to trade creditors. It plans to exit Chapter 11 protection “sometime this spring.”
In a court filing last week, the company said it had negotiated new lease agreements with landlords for about 90 of its 210 stores and that the move will generate annual cost savings of about $3 million. As a result, the retailer has cancelled its plans to close 90 stores it had set when it filed for bankruptcy in December. The reorganization plan also stemmed from negotiations with banks, vendors, and shareholders to restructure its balance sheet and long-term financial obligations, including a commitment from an investor group led by Richard Kayne of Kayne Anderson Capital Advisors LP to invest $10 million to recapitalize the company. Wells Fargo Retail Finance has agreed to provide $30 million as exit financing.
“Today our company took a major step forward in the process of emerging from Chapter 11. I want to commend all of the professionals working on behalf of the company — the unsecured creditors committee, landlords, financial institutions, and otherwise — on their diligence in achieving this result,” said Andrew Feshbach, CEO, in a statement. “Though the plan still requires bankruptcy court approval and must go through the proper vetting process, it calls for an outstanding result for all stakeholders, including our landlords, vendors, lending institutions, bondholders, over 1500 employees and our shareholders.”
With expectations that it will emerge from court proceedings this spring, Walking Co. said it will be well positioned to continue operations with substantially all of its current stores in place if the economy improves over the next 18 months.
