* The Walking Company files for Chapter 11
* Seeks to close 90 of its 210 stores immediately
* Has pre-negotiated reorganization plan
By Emily Chasan
NEW YORK, Dec 8 U.S. shoe retailer The Walking
Company Holdings Inc (WALK.PK) has filed for bankruptcy
protection, with a plan to close almost half of its stores.
The company, which sells comfortable shoes at its namesake
stores and also runs the Big Dogs sportswear clothing line,
filed a voluntary Chapter 11 bankruptcy petition in California
on Monday, saying it would seek approval to begin store closing
sales at 90 of its 210 stores immediately.
With only a few weeks remaining in the holiday shopping
season, the company said it has pre-printed store closing signs
and was ready to begin the wind down, subject to court
approval, according to court documents.
The retailer expanded rapidly, more than doubling in size
from 2006 through 2008, by opening about 140 new stores. It
said it was forced to seek court protection because it was
unable to convince landlords to cut costs under its leases in a
difficult retail environment. It has already started closing
its Big Dog clothing store chain, which once had about 200
stores, and is set to close its final 8 locations by the
The retailer said it will be able to use bankruptcy to
close underperforming stores under a "right sizing" strategy
and expects to file a "pre-negotiated" reorganization plan
The Walking Company, which is about 56 percent owned by its
chairman, Fred Kayne, said in court papers it has assets of
about $103 million and liabilities of about $76 million.
The retailer had sought to raise capital or sell itself to
avoid bankruptcy, but those efforts failed due to a lack of
operating profits amid the recession and above-market rents
that it was paying for many of its stores.
The company has obtained debtor-in-posession financing from
Wells Fargo Retail Finance and Wells Fargo is interested in
providing exit financing, according to court documents. It said
it had a commitment from an investor group led by Kayne
Anderson Capital Advisors for $10 million in new capital to be
provided to the reorganized company. That group is led by
Richard Kayne, the brother of Fred Kayne.
The case is In re: The Walking Company, U.S. Bankruptcy
Court, Central District of California, No. 09-15138.
(Reporting by Emily Chasan; editing by Andre Grenon)