REAL ESTATE

Specialty retailer files for bankruptcy—again; looks for rent breaks

BY Marianne Wilson

A footwear chain specializing in comfort shoes has filed for Chapter 11 protection for the second time in about 10 years.

The Walking Company Holdings Inc. filed for bankruptcy in the U.S. Bankruptcy Court in Delaware. It already had agreed to the terms of a Chapter 11 plan with its key creditors.

The retailer, which operates 208 stores, said that negotiations with its major landlords are already underway which will allow the company “to rationalize its lease portfolio of mall-based stores, bringing it in line with current market rents.”

Walking Company said its controlling shareholders have committed to $10 million equity investment, and it has obtained debtor-in-possession (DIP) financing from it lender, Wells Fargo Bank, for up to $50 million. Wells Fargo will provide “exit” financing that, in addition to the company’s ongoing cash from operations, will allow The Walking Company to move forward “as a substantially stronger company.”

“This recap is the final step in transforming The Walking Company into a more vertically integrated, omnichannel retailer that can not only survive but thrive in the current retail environment,” said CEO Andrew Feshbach. “The Walking Company has been very successful in developing its ABEO brand, which we have integrated with the sale of other leading comfort footwear brands from around the world. We also have made great progress in integrating our mall-based chain with our other channels of distribution, including Internet, wholesale sales to independent comfort shoe retailers, and international expansion.”

Walking Co. cited the loss of a contract from its largest vendor, Deckers Outdoor Corp., makers of UGGs, as among the reasons for recent troubles.

“As a result of the difficult environment for store-based retailing in 2017, Walking Co. could not replace the lost UGG sales fast enough,” Feshbach said in a court declaration.

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