Aldo Group, a well-known footwear retailer based in Canada, has announced its plans to undergo a major restructuring process under the Companies’ Creditors Arrangement Act (CCAA) in response to the financial impacts of the ongoing Covid-19 pandemic. This decision follows a series of high-profile bankruptcies, including Neiman Marcus and J. Crew, as retailers around the world grapple with unprecedented disruptions and increasing debt brought on by the global health crisis.
CEO of Aldo, David Bensadoun, attributed the immense pressure caused by the pandemic and its direct impact on the company’s cash flows as the driving factors behind the decision to pursue restructuring. The Companies’ Creditors Arrangement Act (CCAA), a Federal Act in Canada, affords large corporations the opportunity to reorganize their financial affairs and avoid bankruptcy, while also providing some financial relief to creditors.
Despite the restructuring process, Aldo’s popular brands such as Aldo, Call It Spring, and Globo will continue to operate through online channels. However, reports have indicated that all 6,680 store associates and over half of the employees at Aldo’s headquarters have been placed on furlough as a result of the company’s strategy to navigate through these challenging times.
Aldo also intends to keep its business operations running smoothly as it embarks on developing a comprehensive restructuring plan. Simultaneously, the company will seek similar protection in the United States and Switzerland to ensure a globally cohesive approach to addressing its financial challenges and carving a path towards a more sustainable future.
As the retail industry continues to grapple with the disruptive consequences of the ongoing Covid-19 pandemic, many companies are confronted with challenging decisions to secure their survival. Aldo’s decision to undergo restructuring under the CCAA underscores the immense obstacles and uncertainties currently facing the retail sector. Nevertheless, with a determination to overcome financial difficulties and adapt to the rapidly changing consumer landscape, Aldo remains steadfast in its commitment to providing customers with high-quality footwear through its online platforms.