Shoe City, Filing for Bankruptcy, Plans to Close All Stores
Shoe City has filed for Chapter 11 protection in the U.S. Bankruptcy Court in Maryland and plans to close all 39 stores in Maryland, Virginia and the District of Columbia. According to the bankruptcy filing, the retailer owes approximately $16 million, mostly trade vendor debt. Among Shoe City’s top creditors are New Balance, which the retailer owes nearly $1.6 million, and Timberland, owed $1.4 million.
Founded in 1949 as Eileen Shoes, the company rebranded itself as Shoe City in 1980 and now sells urban-inspired footwear, apparel and accessories. The retailer has been battling declining sales for several years, incurring operating losses of $280,000 and $1.76 million in fiscal years 2020 and 2021, respectively.
The Athlete’s Foot parent company Arklyz Group was planning to purchase Shoe City in May 2022, but the deal fell through. According to the bankruptcy filing, “By all measures, the proposed deal was full of synergies between two companies committed to their respective communities, loyal customers, and philanthropic initiatives. Unfortunately, Arklyz did not close on the deal. As a result, the Debtor was never able to regain profitability.”