Agnew Group Inc., one of Canada's biggest shoe retailers, filed for court protection yesterday under the Companies' Creditors Arrangement Act and said it plans to liquidate remaining inventory at 223 stores across Canada.
The 121-year-old retailer, which opened its first store in Brantford, Ont., said it was a victim of heavy losses caused by unseasonably cool weather, which affected shoe sales during the spring and summer seasons.
Sources close to the London, Ont.-based company said it was also a victim of fierce competition from wholesalers such as Payless Shoes and Wal-mart, which offer customers the chance to buy off the shelf at much lower prices.
Owned by the Montreal-based Bentley Group Inc., the Agnew chain has had difficulty competing because its footwear is priced in the mid- to upper-range of the shoe market.
Documents filed in Ontario Superior Court late yesterday do not say how much the company owes its suppliers and major creditors, led by National Bank of Canada. Those details are not expected to be available until Monday.
But court documents indicate the company has already made plans to finalize the sale of inventory, leases, leaseholds and other assets. For example, the company has hired Chicago-based Hilco Merchant Resources to manage the liquidation process and close Agnew stores across Canada.
The stores operate under the names Agnew, Agnew Family, Agnew Surpass, Aggies, San Marina, 2BU, Solemate, Aston, Ashton C2, World of Shoes and Chaussures Vincent.
The firm has also agreed to sell furniture, fixtures and computer equipment from its head office to Bentleys Leathers for $42,500.
"It is unfortunate that we have to close these stores," Brian Lindy, Agnew's vice-president of finance, said in a statement. He said the decision to file for bankruptcy protection comes after the company held talks with many Canadian and U.S. retailers in a bid to sell all or part of the chain.
"To date, we have finalized some transactions and are in discussions with others," Mr. Lindy said. "We have not been able to find a retailer that wanted the entire chain, so it is unlikely that Angnew will continue as a chain unto itself," he said.
A manager at one Agnew store in British Columbia said he was shocked by the news. "I was under the impression that it was just this store that was closing," he said. But others said the announcement came as no surprise.
"The company owes a lot of money to suppliers, who haven't been paid since May," said Ziggy Greschener, a manager at Montreal-based Sports Industry Credit Association, which represents 85 footwear suppliers and manufacturers.
"Everybody has been waiting for this to happen," he said.