Update
Amid news of the bankruptcy filing, Dansko president Jim Fox said in a statement to FN that the company will continue to back its relationship with The Walking Co.
“We do not expect the filing to have a significant financial impact on Dansko. Based on their plans and debtor-in-possession financing, we will support The Walking Company throughout the reorganization,” Fox said. “Going forward, we expect The Walking Company to emerge from the process and remain a key retail partner.”
What We Reported Earlier
The Walking Company Holdings Inc. has filed for bankruptcy for the second time in 10 years.
The California-based comfort shoe chain filed for Chapter 11 protection on Tuesday in the U.S. Bankruptcy Court for the District of Delaware — following a 2009 bankruptcy.
In the new filing, the company lists the estimated value of its assets between $100 million and $500 million, with its total estimated liabilities at $50 million to $100 million.
Watch on FN
Li & Fung Ltd. and Dansko Inc. are among the creditors cited. The Walking Co. now owes the Hong Kong trading conglomerate $5.2 million and the comfort brand $1.5 million, according to the filing.
The filing also include The Walking Co. subsidiaries: The Walking Co.; Big Dog USA Inc., a manufacturer and supplier of active sportswear and accessories; and FootSmart Inc., a health-centric retailer that it acquired in August 2016.
In a court declaration, president and CEO Andrew Feshbach addressed the company’s struggle to develop its brand between 2013 and 2017 amid the consumer shift to online spending: “The increasing power of internet retailers made the traditional business of retail stores selling products manufactured by others increasingly difficult, and it also had an increasingly negative impact on customer traffic in shopping malls,” he said.
Feshbach also attributed the bankruptcy to the decision by its largest footwear vendor, Deckers Outdoor Corp., to end its relationship with the company and pull Uggs from store shelves at the end of 2016. “While TWC had previously phased out the distribution of other footwear brands and managed to replace the lost sales with other brands (third party or private label) … TWC could not replace the lost UGG sales fast enough,” he said in the court declaration.
As it begins to restructure, The Walking Co. already has the support of its major shareholders. According to the declaration, the company has secured $10 million in equity commitments and $50 million in financing that will allow it to exit Chapter 11 as “a substantially stronger company.”
Founded in 1991 as a retailer of European comfort shoes, The Walking Co. counts about 200 stores across the U.S. It has become the latest mall-based chain to be impacted by rapid digital disruption. Bon-Ton Stores Inc. filed for Chapter 11 bankruptcy last month — becoming the first major chain to file this year after firms such as Wet Seal, The Limited and Gordmans filed in 2017.
