Rockport interim CFO Paul Kosturos says a ‘costly and time-consuming separation’ from adidas was one of the the key factors behind the footwear firm filing for bankruptcy this week.
Founded in 1971, Rockport came under Reebok’s ownership in 1986 before being snapped up by adidas in 2005. However, in early 2015, New Balance Holding, the company’s investment arm, and Boston-based Berkshire Partners LLC bought Rockport from adidas for an estimated $280 million USD — a split that proved to be complicated and costly.
‘Separation of the [Rockport Group’s] operations from the adidas Networks was not completed until November 2017 and proved to be more complex, took meaningfully longer, and was significantly more expensive than planned,’ said Kosturos during declaration. ‘In addition, [Rockport] encountered operational challenges during the initial development of [its] own logistics network that negatively impacted revenue.’
With adidas currently experiencing strong growth, it appears the parting of ways couldn’t have come at the worse time. Rockport’s woes are echoed industry wide, as footwear firms Aerosoles, Nine West Holdings, Payless ShoeSource and Walking Co. have also recently filed for bankruptcy.