The ALDO Group Inc. announced that it sought and obtained an Initial Order pursuant to the Companies’ Creditors Arrangement Act (the “CCAA”) from the Superior Court of Québec (the “Court”).
In addition, the company has voluntarily applied for similar protection in the United States and is about to do the same in Switzerland. The company intends to use the proceedings to stabilize the business and build on its legacy in retail fashion.
Among other things, the Initial Order provides for a stay of proceedings in favour of the company for an initial period of 10 days, subject to extension thereafter as the Court deems appropriate, and the appointment of Ernst & Young Inc. as Monitor in the CCAA proceedings.
The company will work to complete its restructuring in a timely fashion and hopes to exit from the process as soon as possible and better positioned for long term growth.
Rationale for Restructuring and Plan for the Future
David Bensadoun, Chief Executive Officer said: “ALDO is one of the world’s leading fashion footwear and accessory brands with a solid track record of growth and profitability for almost half a century. It is no secret that the retail industry has experienced rapid and significant change over the last several years. 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. 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.”
“Throughout the process, ALDO expects to carry on business while it develops and implements a comprehensive restructuring plan across the organization. With our deep fashion footwear heritage, experienced leadership team, extensive omnichannel capabilities and loyal customer base, we firmly believe that we will emerge from the restructuring process and from the challenges posed by the COVID-19 pandemic. We will come out stronger and well-positioned to continue leading the way in fashion retail,” added Bensadoun.
ALDO, Call It Spring and GLOBO’s eCommerce websites will remain open throughout the process. The company’s corporate stores, which are temporarily closed due to COVID-19, will re-open based on the guidelines set by local governments and health authorities.
ALDO will continue to be headquartered in Montreal, Quebec.