The Walking Co. to exit Ch. 11 in April
Santa Barbara-based shoe retailer The Walking Co. said March 22 that it could emerge from its $68.5 million Chapter 11 bankruptcy by the end of April.
In December, the company took on mall landlords by filing to reorganize, citing untenable leases it signed during what company leaders called a “high water mark for retail space.” It listed $79 million in assets and $68.5 million in debts.
In February, The Walking Co. filed a reorganization plan that would let it keep nearly all of its retail locations and pay off its debts by restructuring its balance sheet and reworking some of its long-term debts.
The Walking Co. said March 22 that it has a confirmation hearing for that plan slated for April 23 and could emerge from bankruptcy “early in the week of April 26.”
“Working closely with its bank, landlords, vendors, and shareholders since filing in December of 2009, the company has been able to restructure its balance sheet and long-term financial obligations,” The Walking Co. said in a release. “As a result, the company submitted a reorganization plan to keep 207 of its 214 current store locations open and pay off all of its debts and future obligations to trade creditors.”
The Walking Co. expanded rapidly between 2005 and 2008. But as the retail environment turned sour, the company struggled, shuttering and then finally selling its Big Dogs clothing chain last year to focus on footwear.
The company was once traded on the Nasdaq. But with fewer than 100 shareholders and a low market capitalization, the company decided it could save money by withdrawing from the exchange in April. At Sept. 30, 2008 — the last time the company reported financial information — The Walking Co. had lost $9.7 million for the year.
The company said that while its early 2009 restructuring was largely successful, it couldn’t get the landlords at many of its stores to lower rents.
“We believe our business model is sustainable in today’s world, despite declining consumer spending and mall traffic at present,” Andrew Feshbach, chief executive of the firm, said in a release when the company filed Chapter 11 in December 2009. “However, the unfortunate timing of our rapid expansion caused us to enter into lease commitments at what now appears to be the high water mark for retail space.”