Montreal-based shoe retailer Aldo Group Inc. announced Thursday it filed for creditor protection in Quebec, and will seek similar court orders in the U.S. and Switzerland, as the fallout from COVID-19 continues to weigh on Canadian companies.
Aldo said in a statement that the creditor protection sought under the Companies' Creditors Arrangement Act will help to stabilize its business and ensure that it can survive the pandemic.
"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 " said David Bensadoun, Aldo’s chief executive officer, in a statement.
In its release, Aldo said it will continue to operate online during the restructuring and it intends to re-open its stores once restrictions associated with the pandemic are lifted.
The company has about 8,000 employees and manages approximately 700 stores, according to a listing on the company's court monitor website. It also distributes its products to about 3,000 stores in more than 100 countries.
Canadian retailers are scrambling to find ways to survive as provincial emergency orders to help curtail the spread of the novel coronavirus have weighed significantly on sales. While many retailers have pivoted their businesses to ecommerce, others have had to shut their doors either temporarily or permanently due to the lack of customer traffic.
U.S. department store chain Neiman Marcus Group Inc., which is partly owned by the Canada Pension Plan Investment Board, and retailer J.Crew Group Inc. are among the big names that recently filed for bankruptcy protection while citing challenges brought on by the COVID-19 pandemic.