Ownership of ethical American shoe retailer Toms will be transferred to its creditors.
CEO Jim Alling addressed a letter to employees informing them of the transfer from current owners Bain Capital and founder Blake Mycoskie to Jefferies Financial Group, Nexus Capital Management and Brookfield Asset Management.
The move is intended to “identify the best path forward for our company,” read the letter. It entails a new investment of US$35 million and an enhanced capital structure including debt relief. The shoe retailer Toms distributes products through more than 500 stores worldwide, including department stores and single-brand outlets.
The firm would have collapsed entirely this year facing a crippling debt of $300 million if the restructure and rescue plan had not proceeded.
Toms was founded in 2006 by Mycoskie, a Texas entrepreneur, to design and retail shoes, later adding eyewear, coffee, apparel and handbags. Its business model was based on business with a purpose concept, with the company donating a pair of shoes to the underprivileged for every pair sold. By 2012 more than 2 million pairs of new shoes had been given to children in need around the world, including in Argentina, Ethiopia, Guatemala, Haiti, Mexico, Rwanda, South Africa and the US.
In Asia the company-operated stores with partners in Japan and the Philippines. In 2014 it opened a store in Bangkok’s CentralWorld and Central Embassy shopping centers in partnership with Star Fashion Co. The CentralWorld store has since closed, but it still shows on Central Embassy’s store directory.
At the time, Hajime Birnbaum, international sales and marketing director for shoe retailer Toms, said taking the brand into Thailand, which he described as a very pro