Aerosoles Warns of Up to 74 Store Closures Following Bankruptcy
AGI HoldCo, which operates under the brand name Aerosoles, has revealed plans to close most of its stores after filing for Chapter 11 bankruptcy.
The 30-year-old Aerosoles, with about 88 standalone retail stores, is planning to close up to 74 stores because those stores continue to underperform. The New Jersey-based company announced the restructuring plan as it struggled with declining sales and a mounting debt burden.
The company says that the store closures are the most “critical” part of its restructuring plan. The management team says it will be “right-sizing” its retail footprint as the brand continues to face declining foot traffic at its stores.
Aerosoles operates through both standalone retail stores and shelf space in big department stores at major malls across the United States. Malls, however, are seeing a significant decline in foot traffic and losing their major mall anchors as American shoppers turn to online shopping.
Aersoles has likewise suffered, due to the changing consumer trends, and its management team felt forced to undertake the restructuring initiative in, what it calls “an effort to realign the business with the changing marketplace environment.”
The company has already begun closing stores and this could continue for the next four month, during the ongoing bankruptcy proceedings. Management has, however, indicated that Aerosoles will continue to operate its flagship stores in New York and New Jersey, as well as continue to sell its products through other retailers.
Meanwhile, the company has revealed that it will be investing in its digital platform in order to allow a better shopping experience for online shoppers.
Digital retail, primarily being led by Amazon.com, Inc., has substantially hurt brick-and-mortar retailers, causing them to wind down their businesses and forcing many into bankruptcy. Fashion retailers have found themselves in a situation that some are calling a “retail bloodbath”.
Aerosoles is not the first footwear retailer to go bankrupt in 2017. Earlier this year, famous discount footwear retailer Payless ShoeSource, Inc. filed for bankruptcy protection and announced plans to close over 800 stores.
American retail is currently witnessing an unprecedented number of retail store closures.
“Aerosoles files for Chapter 11 bankruptcy,” Retail Dive, September 18, 2017.
“Aerosoles Files Chapter 11 to Implement Operational and Financial Restructuring,” PR Newswire, September 15, 2017.