(Reuters) - Women’s shoe chain Aerosoles Group filed for Chapter 11 bankruptcy protection on Friday with a plan to close most of its stores and focus on its wholesale, e-commerce and international businesses, becoming the latest casualty in the struggling U.S. retail sector.
Aerosoles, formally known as Aerogroup International Inc, blamed its bankruptcy on declining mall traffic, big industrywide markdowns and a shift toward online shopping, according to a court filing.
At least a dozen retailers selling apparel, electronics and discount shoes have filed for bankruptcy this year to slash their store count and better compete with e-commerce companies such as Amazon.com Inc (AMZN.O).
Edison, New Jersey-based Aerosoles said it would close 95 percent of its 78 stores while maintaining four flagship shops in New York and its home state. Known for its comfortable flats and wedges, it will continue to sell its shoes online and at other retailers and department stores.
“This restructuring will enable Aerosoles to become a stronger, more vibrant brand, and position the company for future growth,” interim Chief Executive Officer Denise Incandela said in a statement.
The company, once part of storied shoe company Kenneth Cole Productions Inc, said it expected to complete the Chapter 11 restructuring, which could include a sale to a third party, within about four months.
In its court filing, Aerosoles said it had rejected two proposals from potential investors before the bankruptcy filing but remained in talks over a possible deal. Private equity fund Palladin Partners LP has owned a majority stake in the retailer since 2014.
The company listed assets of $10 million to $50 million and liabilities of $100 million to $500 million.
The case is In re Aerogroup International, U.S. Bankruptcy Court in Delaware, No. 17-11962.
Reporting by Gayathree Ganesan in Bengaluru and Tracy Rucinski in Chicago; Editing by Lisa Von Ahn; Editing by Anil D'Silva and Lisa Von Ahn