NEW YORK (Reuters) - Women’s shoe retailer Aerosoles Group is planning to file bankruptcy to exit its unprofitable store leases, people familiar with the matter said on Thursday.
The shoe seller’s bankruptcy will come as soon as this month, said one of the people. Aerosoles, known for its comfortable flats and wedges sold in its own shops and in department stores, plans to remain in business, unlike many other retailers who filed for bankruptcy in recent years and liquidated, said the people.
At least a dozen retailers selling apparel, electronics and discount shoes have filed for bankruptcy this year to slash their store count and better compete with e-commerce giants such as Amazon.com Inc.
The shoeseller, which has about 80 stores in the United States, plans to move forward after bankruptcy with about a quarter of those locations, the people said. Aerosoles has not made rent payments for September, said one of the people.
Edison, New Jersey-based Aerosoles and its private equity owner Palladin Consumer Retail Partners did not return calls or emails seeking comment. The people could not be identified because the company’s plans are not yet public.
Reuters reported in July that the company was considering strategic options including a sale or debt restructuring with help from investment bank Piper Jaffray Companies and financial advisory consultant Berkeley Research Group.
The company was once part of storied shoemaker Kenneth Cole Productions Inc.
In addition to battling e-commerce, Aerosoles has also been challenged in luring shoppers to its stores and website with products that stand out from its competitors, as more of them now offer affordable, comfortable shoes.
Aerosoles also has more than 300 stores around the world including in China, India and Peru.
Aerosoles competitor Payless ShoeSource Inc emerged from bankruptcy last month after filing this year and closing hundreds of stores. Trendy shoe label Nine West Holdings Inc hired an advisor to find ways to bolster its balance sheet.