Troubled shoe makers and retailers, Florsheim Group Inc, have applied for Chapter 11 bankruptcy protection after four years of losses and have agreed to sell their domestic wholesale business, related assets and certain retail stores to Weyco Group Inc.
The Chicago-based footwear firm have agreed to sell their US wholesale business, related assets, some of their 155 stores and foreign units to Milwaukee-based Weyco for around $47 million. The 110-year-old shoe producers sell their products in more than 6,000 stores around the world but have been hard hit by recent losses triggered by the global economic recession and the financial fall-out of the September 11 terrorist attacks.
Florsheim chairman and chief executive officer, Peter Corritori, said: ‘After considering many strategic alternatives, the board of directors, with the concurrence of senior management, decided that the Weyco transaction and Chapter 11 filing present the best option for Florsheim and for preserving the continuity of the Florsheim brand.’
He continued: ‘Despite our best efforts to improve revenue, reduce costs and maximise cash flow, the company’s financial condition deteriorated further in recent months as a result of the economic recession and the disproportionate impact that the events of September 11 have had on the retail apparel and footwear industry.
‘We have identified a strategic buyer in Weyco: our products fit well with Weyco’s existing portfolio of leading brands; Weyco has a history of success serving many of the same wholesale customers; and Weyco will be able to make optimum use of the Florsheim assets.’
