Covid-19 claims another victim. Aldo Group, Canadian company that manages about 3,000 stores and employs about 8,000 people all over the world, used the Companies’ Creditors Arrangement Act to protect itself from creditors. It consists of Canadian Act allowing insolvent companies to restructure their debt and commercial activities. Aldo Group is trying to do the same in the USA and Switzerland. Meanwhile, it tries to put its recovery strategy on paper.
Aldo Group asked, and obtained protection from creditors thanks to the Quebec Court (in Canada). Ernst & Young was nominated to “manage the proceeding in Canada”. Meanwhile, Aldo has fired 270 of its 1.150 employess working at its HQ. Aldo also manages about 40 stores in Italy thanks to its partnership with Gaia. At the end of 2016, the group had presented its plan to reach 100 stores before 2020. David Bensadoun, the group’s CEO and son of the founder, has stated to Footwear news that his decision to utilize the said Act was taken after two requests for more financing were refused.
The restructuring plan
Bensadoun also stated that “the project to transform and improve the business, which was undertaken last year, has had good results”. The company’s restructuring plan includes the acceleration of the diversification of sales’ strategies. In other words, the company aims at reducing the amount of revenue generated in physical stores, as they generate about 50% of total revenue, as of today. Specifically, sales will need to be allocated, in comparable quotas, to stores, e-commerce, franchising and wholesale. “I think it will take time for people to go back to their routine. We don’t expect booming sales, but regular growth”, stated Bensadoun.
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