July 28, 2015 - 3:15 PM
TORONTO - Shoe retailer Sherson Group, which operates Nine West stores in Canada, has been given a reprieve from its creditors until next week.
Court documents say the company, which filed for bankruptcy protection in early July, will now have until Aug. 6 to get its finances in order.
Lawyer Sam Babe, who is representing Sherson Group, said Tuesday the extension meets the requests of the company, which wants to move quickly to resolve its financial problems.
Sherson Group told Ontario Superior Court it has been working with Nine West Group Inc., the New York-based company which licenses its name to Sherson, to stay in business. It owes Nine West Group about $19 million.
"Granting an extension of time to file a proposal will give it time to conclude such an agreement with the Nine West Group, which would in turn permit Sherson (to) present a viable proposal to its creditors," the company said in documents filed Monday.
The Toronto-based company owes $32.2 million to more than 60 different suppliers, lenders and other businesses, according to documents filed earlier this month.
In an affidavit, CEO Stephen Applebaum, who also owns the company, said Sherson Group was affected by the sudden drop in the value of the Canadian dollar and a "failed pricing and volume purchasing strategy" that was put in place by Nine West Group.
Sherson Group outlined to the court several steps it has taken to make dramatic changes to its business.
Over the past month, it has laid off staff at its headquarters and eliminated a shift at its distribution centre. The company is also disclaiming the lease to one unprofitable location and moving ahead with several store closures that were already planned.
The company also said it's in talks with two lease consultants to restructure its lease portfolio.
Sherson Group operates 43 Nine West locations in Canada, two factory outlet stores and a wholesale operation. The company has about 549 employees, it said.
News from © The Canadian Press, 2015