Footwear retailer Rockport Group filed for Chapter 11 bankruptcy for the second time in five years. According to the company’s press service, at the end of 2022, there was “an inadequate liquidity cushion to survive further economic challenges.”
Rockport’s liabilities and assets are up to $100 million, with $47 million owed to its five most prominent suppliers and about $100 million total, including 61 with payments due by the end of August 2023.
Rockport’s 2022 revenue was more than $200 million. This spring, however, the company said it might close its Massachusetts headquarters, which could result in about 150 job cuts.
Rockport traces its history back to 1971. The company specializes in sneakers, shoe shoes and sandals. Since 1986, the brand has been owned by sports giant Reebok. Finally, in 2015, it sold the business to a joint venture between Berkshire Hathaway and New Balance.
After leaving Reebok, the company ran into financial problems. In 2017, the brand owners sold their stake to lenders. And already in 2018, Rockport restructured. After that, a new strategy was adopted to expand the assortment and attract a youth audience. The bankruptcy case was closed by court order in 2020.
Rockport’s revenues in 2020, amid pandemic and retail restrictions, dropped from $275 million to $162 million, and the company’s financial situation reached a critical juncture.
“Unfortunately, that sales bump never materialized. Instead, in response to inflationary pressures and weakening economic conditions, the Debtors’ wholesale customers and distributors canceled or materially cut back on orders, leaving Rockport holding significant excess inventory,” Joseph Marchese, chief restructuring officer of CB Marathon Midco, Rockport’s parent company, said in a court filing.
Rockport plans to stay in business while filing for bankruptcy. As of the second quarter of 2023, the company operates in 60 countries, offering products in 1,100 stores. The brand produced 4.8 million pairs of shoes in 2022.
