Rugged boot maker Rocky Brands found itself entangled in the bankruptcy of boating and sailing retailer West Marine.
The top 30 list of unsecured creditors includes Rocky Brands US LLC, which is owed $1.1 million. Xtratuf, Rocky’s brand of 100 percent waterproof and slip-resistant boots, is sold by West Marine.
One other fashion brand made the list, Luxottica of America Inc., the sunglass brand, which is owed $910,174.74. Also on the list is Kent Water Sports LLC, owed nearly $1.17 million. Kent Water Sports owns the Ho Sports brand, which makes water ski boots.
Related Stories
Deck and boat shoes made by the Sperry and Helly Hansen brands are also sold by West Marine, but not in enough volume to make the Top 30 list on unsecured creditors.
You May Also Like
In West Marine’s Chapter 11 petition filed on Sunday in a Delaware bankruptcy court, the total number of creditors was listed as more than 100,000. The retailer has debt obligations totaling $549.2 million, according to court filings. The boating retailer said it has entered into a Restructuring Support Agreement with its key financial stakeholders that include 96.2 percent of its term loan lenders, 100 percent of its FILO (first-in, last-out, a specialized loan in asset-based lending) lenders, and 93.9 percent of West Marine’s equity holders.
Matt Powell, an analyst at Spurwink River, said the “Outdoor business boomed during the pandemic, helped by the free money.” He is referring to the funding and relief support from state and federal governments in the aftermath of the COVID-19 pandemic. He also said that there’s a reason why outdoor retailers have been undergoing a reset of their businesses.
“Many in the industry thought the good times would go on forever, but they did not,” Powell said. “Consumers who purchase a big ticket item, like a kayak, during the pandmic did not need another one.”
That resulted in a backup of inventories and a slowdown in traffic, forcing the weakened industry to cut back, he said.
In the case of West Marine, which was founded in 1968 as a small rope business in California, the retailer said it has “faced headwinds in recent years, including supply chain disruptions, extreme weather events, and shift in consumer behavior.” The retailer added that the Chapter 11 petition “addresses these challenges by strengthening the balance sheet, reducing debt levels and improving financial flexibility.”
West Marine’s 200 retail locations across 34 states and Puerto Rico remain open for business, as well as its online platforms. Consumers also continue to have access to the retailers products via the West Marine Pro App. But as is typical in most retail bankruptcies, the retailer will either find a buyer — a bid deadline has been set for June 26 — or its lenders will become the new owners. In addition, underperforming store locations are expected to close. The 200 doors require about $55 million in annual lease payments, which has depleted West Marine’s liquidity, according a declaratory statement filed with the bankruptcy court by the retailer’s CEO Paulee Day.