Footwear retail chain Aldo last week filed for bankruptcy protection in its home country Canada, saying the coronavirus pandemic had put “too much pressure” on its business and cash flows.
“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,” Aldo CEO David Bensadoun said in a statement released May 7.
“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,” Bensadoun added.
Aldo said it would undertake similar proceedings in US and Switzerland.
As part of the procedure, Aldo said it would restructure its organization and would continue online operations and restart its offline stores in Canada once lockdown restrictions are relaxed.
Aldo has over 8,000 employees worldwide and manages about 700 stories, according to documents filed with the court. Consulting firm EY is managing the bankruptcy process.
Major Brands India, which operates the India franchise, said it does not foresee any impact from the recent development on Aldo’s India stores.
“We have a long standing association with Aldo Group International and share a strong relation with them,” said Tushar Ved, President, Major Brands (India). “We don’t see this transition affecting India operations in any way. We launched the first ever Aldo store in India, in Mumbai, way back in the year 2005 and since then the brand has expanded to every major city in the country.”
In a statement to its franchises, Aldo said the filing of bankruptcy protection was done with an intention “to restructure and reach a settlement with its creditors with a view to continue as a going concern without interruption.”
“Aldo has reiterated its engagement towards its franchisee network and fact that they are an integral part of their success… The protection afforded by the reorganization proceedings will allow the retail organization to “right-size” our owned and operated brick and mortar business, while enabling us to confidently supply our franchisee partners without disruption,” the group said in a statement.