(Reuters) - Canada’s privately held Aldo Group Inc said on Thursday it would restructure under the Companies’ Creditors Arrangement Act (CCAA) as the impact of the COVID-19 outbreak weighed on the footwear retailer’s business.
The announcement follows the high-profile bankruptcies of Neiman Marcus Group NMRCUS.UL and J. Crew Group Inc, as retailers around the world face unprecedented disruption and heavy debt piles brought on by the pandemic.
“The impact of the COVID-19 pandemic has put too much pressure on our business and our cash flows,” said Aldo’s Chief Executive Officer David Bensadoun.
The CCAA is a Canadian Federal Act that allows large corporations to restructure their finances and avoid bankruptcy, while allowing creditors to receive some form of payment for amounts owed to them.
Montreal-based Aldo said the websites for its brands ALDO, Call It Spring and GLOBO would remain functional throughout the restructuring process.
All 6,680 store associates and more than half of the employees at its headquarters have been furloughed according to a BNN Bloomberg report here
The company said it expects to carry on business while developing a restructuring plan and is looking to avail the same protection in the United States and Switzerland.
Reporting by Aditi Sebastian; Editing by Ramakrishnan M.