Rockport Group LLC, a Newton-based maker of casual shoes for men and women, filed for bankruptcy protection Monday, citing a “costly and time-consuming separation” from adidas AG, which owned the company until 2015.
Rockport said it agreed to sell its assets for $150 million to a fund run by Charlesbank Capital Partners, a private equity firm with operations in Boston and New York. Other bidders could emerge as part of the bankruptcy, and the court will have to sign off on a final deal.
Under the agreement with Charlesbank, Rockport would continue to offer its shoes through retailers like Macy’s and Lord & Taylor, which together account for 57 percent of its sales. But Charlesbank hasn’t said whether it would keep Rockport’s own outlets open.
“At this stage, it is not certain which or how many, if any, stores Charlesbank will acquire,” Rockport said on its website.
The company has 60 stores in the United States and Canada, including one at the Wrentham Outlets.
The Chapter 11 filing is the latest turn in the 47-year history of the company, which was founded in Marlborough in 1971 by the father and son team of Saul and Bruce Katz, and was among the first American shoe companies to promote walking as a fitness activity. Their ties to the business go back even further.
Saul’s father, Samuel Katz, owned the Hubbard Shoe Co., which produced children’s shoes in Rochester, N.H., at one point employing more than 900 workers between two factories. Saul Katz took over in 1943, and then watched the industry falter in the 1960s as manufacturing moved offshore. He lost his entire fortune and “held on until there was no more possibility of operating,” Bruce Katz said in his father’s obituary in 2012.
Saul, who had testified before Congress in an effort to protect US domestic shoe manufacturing, ultimately decided it was better to stay in the game and play by its new rules. He and Bruce created Rockport Co. and began producing footwear in Brazil. The pair sold the company to Reebok in 1986 for $118.5 million and eventually reclaimed the Hubbard name, launching the Samuel Hubbard brand of dress shoes in 2014.
Meanwhile, Rockport continued its operations under Reebok until the fitness brand was purchased by adidas in 2006. The German sportswear giant sold Rockport to New Balance Holdings and Berkshire Partners nine years later for $280 million, and the companies have slowly unraveled their supply chain operations over the last two years, according to regulatory filings. But that uncoupling “proved to be more complex, took meaningfully longer, and was significantly more expensive than planned,” Rockport said.
The company also had to cope with the closing of three foreign factories that were producing its women’s shoes, which forced it to relocate operations and spend far more to expedite the shipping of products to consumers. It also got into a dispute with one of its logistics providers.
On top of all that, Rockport pointed to a harsh reality of the shoe business: the shift to online shopping.
Beth Goldstein, fashion footwear and accessories analyst at NPD Group, said Rockport “has lost share to the sneaker business and to competitors in the casual space,” as the sale of leisure shoes is actually seeing an upswing. Sales of men’s and women’s casual shoes rose 4 percent in the first quarter of 2018 to $1.3 billion, up from $1.26 billion in the same period last year.
“Across the board — in footwear, fashion, and even in other industries — there have been many companies that were just not set up for the shifts in terms of the retail landscape and consumers’ preferences,” she said.
Ultimately, New Balance and Berkshire made the decision to sell off Rockport’s assets to creditors last year. Those owners, citing the financial factors, decided to sell again in a quiet process that began last December. The company said four bidders came forward, but only named Charlesgate in its filings.
Rockport is currently carrying $287 million in debt; it has arranged $20 million in financing to carry it through bankruptcy.
This story has been updated to clarify Goldstein’s statements about Rockport’s place in the footwear industry.Janelle Nanos can be reached at firstname.lastname@example.org. Follow her on Twitter @janellenanos.