Shoe Shake Up! Charlotte Olympia Files for Bankruptcy; Nine West Close to Filing for Bankruptcy; Ret
- Hello at Cece Feinberg Consulting
- Mar 1, 2018
- 3 min read
For Charlotte Olympia, the effects of retail’s disruption couldn’t be more real.
The luxury footwear brand filed for Chapter 11 bankruptcy protection this week, citing “unprecedented brick-and-mortar retail disruption,” Business of Fashion reported, referencing the filing.
According to reports, the brand developed by British designer Charlotte Dellal, has never been profitable, and last year it lost more than $6 million. Looking at its 20 largest unsecured debts alone, the business owed landlords, cleaning services and events companies $440,759, and it’s total outstanding debt could be upward of $20 million.
In October, the brand most famous for its kitty-face flats, was at least presenting itself as living in luxury, collaborating with Veuve Clicquot for a line of sparkling heels and a special edition of champagne.
Following the filing, the brand will no longer have a physical store presence in the U.S., shuttering its four retail stores in New York, California and Nevada.
“We are closing our U.S. entity that we set up for our U.S. retail operations, as we are closing the stores. Wholesale business, however remains intact,” company president Bonnie Takhar told BoF.
Liquidation of its U.S. assets is expected to happen in short order, with $410,000 in funding from a subsidiary of Charlotte Olympia Holdings, led by Dellal and Takhar.
The brand, launched in 2008, and sold at places like, Nordstrom, Saks Fifth Avenue, Net-a-Porter, and Shopbop, has reportedly brought in revenues of 16.8 million pounds (roughly $23 million) as of March 2017, and was at the same time reporting losses of 6.4 million pounds ($9 million).
Meanwhile, footwear retailer Shiekh Shoes LLC recently filed for Chapter 11 bankruptcy protection. The Ontario, Calif.-based sneaker seller, which last year acquired streetwear e-commerce site Karmaloop, filed its petition in the U.S. Bankruptcy Court for the Central District of California, listing the value of its assets as between $50 million and $100 million — equal to the estimated value of its liabilities. According to the filing records the company owed money to several major athletic brands including Nike: $16 million; Timberland: $1 million; Adidas: $674,177; Puma: $532,944; Vans (VF Imagewear Inc.): $388,780; Converse: $295,040; Under Armour: $253,461
And rumors abound that Nine West is close to filing for bankruptcy.
In a move that has been speculated about for months, Nine West Holdings Inc. is close to filing for Chapter 11 bankruptcy, according to a new report from Bloomberg, which cited sources with knowledge of the situation.
The deal would allow Nine West to restructure about $1.5 billion in debt and would include a sale of parts of the company, Bloomberg said. The pre-planned filing would likely happen by March 15, before an interest payment.
If the bankruptcy deal does come to fruition, Nine West would be the latest fashion company to take this course of action amid a challenging retail climate.
In 2017, a number of major fashion companies headed to bankruptcy court. Some closed down for good, while others sought temporary relief.
Payless sought Chapter 11 protection last April but quickly re-emerged in August. Payless, which had 4,400 stores in 30 countries and set out to close about 400 at the start of its bankruptcy proceedings, now has 3,500 brick-and-mortar outposts. The previously debt-saddled firm said it was able to shed about $435 million in funded debt. Its post-bankruptcy strategy emphasizes a focus on Hispanic consumers.
Last September, Aerosoles announced plans to restructure after filing for Chapter 11 bankruptcy protection due to its outstanding loans. The company said its reorganized business will focus on e-commerce, wholesale and international businesses.
Who do you think will be the next?
