Montreal-based shoe chain Aldo Group is seeking protection from its creditors in Canada, the United States and Europe because of disruptions caused by COVID-19.
Founded in Montreal in 1972 by Moroccan immigrant Aldo Bensadoun, the chain has grown to the point where their shoes, handbags and other fashion accessories are sold in 3,000 locations in 100 countries worldwide.
All in all, the company employs 8,000 people and also owns retail chains Globo shoes, and Call It Spring.
In a press release Thursday, the company said it has been pummelled by the COVID-19 pandemic just like other retailers.
“It is no secret that the retail industry has experienced rapid and significant change over the last several years,” CEO David Bensadoun said. “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.”
The company is asking courts in Canada and the U.S. for protection from creditors while it restructures the business. In Canada, the company has filed under Companies’ Creditors Arrangement Act, the law that covers businesses that have gone insolvent. It plans to pursue similar protections under Swiss and U.S. law.
“After conducting an exhaustive review of strategic alternatives, we determined that filing under CCAA and related proceedings is in ALDO’s best interest to preserve the Company for the long term and survive through this challenging period,” Bensadoun said.
The CCAA filing gives the company protection from its creditors for at least 10 days until it can come up with a plan and the company said it is aiming to eventually reopen.
“We will come out stronger and well-positioned to continue leading the way in fashion retail,” Bensadoun said.