US Rockport footwear group join Chapter 11 after long and troublesome breakup with Adidas

First they announced they went bankrupt, then they “attached the solution to the problem”. Rockport Group made public they joined Chapter 11, but they also pointed out they sold all their assets to CB Marathon Opco, an affiliated company of Charlesbank. Charlesbank will act as a “stalking horse bidder” during the transfer process under the supervision of the Court. In financial terms, the stalking horse bidder is a company that takes part in the auction sale of the bankrupt assets only on a nominal basis. Their bid, which is previously arranged on purpose, simply aims to prevent progressive underbids by the time the real auction begins. Rockport, headquartered in West Newton, Massachusetts, manufacture and sell men’s and women’s footwear for a number of brands, such as Aravon, Dunham and Rockport; not to mention the famous Rockport Cobb Hill Collection. Founded in 1971, it was bought out by Reebok in 1986. Afterwards, Reebok and its subsidiaries were bought out by Adidas, in 2005. In August 2015 Berkshire Partners, a private investment company (among investors, New Balance Holding), took control over Rockport: the estimated value of the transfer was 280 million dollars. Paul Kosturos, temporary CFO of the group, pointed out, while talking to Footwear News, that the last transaction deal, and its subsequent effects, negatively affected the business: “In fact, our breakup with Adidas came to completion only in November 2017 (that is, more than two years after the transfer, editor’s note); moreover, it turned out to be more complicated and expensive than expected. Furthermore, Rockport had to deal with some operating problems during the early development of their own logistic network, and, as a consequence, incomes were badly affected as well”. Some more reasons that brought the group to bankruptcy have been a fierce competition, the stores’ performance, below expectations, and a few problems related to supply chain.

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