Sad news, Ontario, California-based-based Shiekh shoes was not able to find the refinancing it was seeking and is now filing Chapter 11 bankruptcy. The company has 124 specialty retail store locations across ten states though most of its locations are in California.
As part of Chapter 11 reorganization, the company plans to close 31 stores and will pursue restructuring of its leases and debt. The biggest hurdle facing Shiekh is convincing vendors to reopen up shipments to the chain. When the brand began to have difficulty meeting payment deadlines earlier this year, major brands canceled shipments, including Nike. Even with the pull back, according to WSJ, the chain currently owes Nike more than $16 million.
As such, it is possible the chain will end up shutting down altogether. Given the company has 1,743 employees, one hope it finds a way.
Shiekh shoes also owns Karmaloop, an online retailer it purchased in March 2016, a deal embroiled in controversy based on what Skiekh believed it was purchasing from Comvest Partners versus what was actually delivered.
Shiekh is known for its sneakers but a big part of its business since it was founded in 1991 has always been a women’s fashion shoe business, which likely has been impacted from both changing fashion trends and online competition.
As well, when Shiekh expanded through the acquisition of a Midwestern chain several years ago, it discovered afterwards that Nike wouldn’t extend allocation to the newly-acquired doors.
