Shoe Pavilion Files for Bankruptcy
- Jul 17, 2008
Shoe Pavilion Inc. and its subsidiary Shoe Pavilion Corp., have filed for Chapter 11 bankruptcy. The Sherman Oaks, Calif.-based retailer filed its petition in United States Bankruptcy Court for the Central District of California-San Fernando Valley Division and will continue to operate the business as “debtors-in-possession.” The company operates more than 115 stores nationwide, mainly in the West, which will remain open despite the filing. Court filings showed that the retailer had $61 million in assets against more than $25 million in liabilities. Last month, Shoe Pavilion received a notice from the NASDAQ stock market that the company’s stock price was beneath the stock exchange’s minimum price, as it had traded below $1.00 for 30 consecutive business days. The company is in danger of being delisted by the exchange if its price does not increase over NASDAQ’s minimum for 10 consecutive trading days by December. News that Shoe Pavilion had filed for bankruptcy sent the price of shares down to $0.07. With the filing, the firm joins other troubled retailers who have been forced to file for bankruptcy protection, including Steve & Barry’s, which filed last week. Beyond strictly apparel and footwear retailers, other firms have felt the effects of recent downturns in the market. Over the past month, CPN has reported on several retailer who have been forced to adjust their strategies, by either store closures, or reductions in growth. Linens ‘n Things recently announced the closure of 120 stores nationwide and its plans to divest itself of real estate holdings after filing for Chapter 11 bankruptcy protection. Starbucks also announced the closing of 600 underperforming stores in the United States. Walgreens recently revealed plans to pare back on its projected expansion.