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IN PHOTO: A customer looks at shoes on display at a store of a major second hand clothes importer in Hungary, in Budapest November 5, 2014. The global financial crisis hit hard in central and eastern Europe, but one industry has thrived: second-hand clothing stores. While in western Europe the squeeze on household finances prompted many consumers to turn to discount retailers like Primark, their peers further east - where wages are significantly lower - have shifted to the used clothing sector. Second-hand clothes retailers in Hungary, Poland, Bulgaria and Croatia have grown rapidly and, as the pace of income convergence between the West and Eastern Europe slows, they are investing millions of euros to expand their businesses further. REUTERS/Bernadett Szabo

One of the best shoe distributers operating at 47 Nine West retail stores in Canada has gone to the extent of filing a bankruptcy protection as it faces intense competition and weaker loonie. Sherson Group Inc. is licensed and holds the Canadian rights to brands such as Easy Spirit, Anne Klein, Bandolino, Mootsies Tootsies and Flogg.

According to CBC news, court documents showed the privately held company owed around AU$43.14 million to 69 creditors. The Nine West Group Inc. in the United States that has provided the company with license to supply shoes and accessories owes almost up to AU$ 25.45 million.

The court documents also revealed that CEO Stephen Applebaum also owed at least AU$5.09 million from the company itself. CJAD news reported that Business Development Bank of Canada Capital is also owed AU$4.02 million. Richter Advisory Group has been chosen to serve as trustee in the process.

Since 2009 the company has been facing financial difficulties due to which it has cut down many underperforming Nine West stores in the country. High foreign exchange cost and stiff retail market competition have pushed the company further to this stage. Canada’s retail market has been running through a series of bankruptcy.

One of the partners at the Richter Advisory Group, Gilles Benchaya said, “the company has every intention to put together a restructuring proposal to its creditors to maintain operations.” Although none was available to comment as to how it would affect the stores and overall operations. Sherson Group has 30 days of protection from its creditors from the initial filing made June 29, though it could request a 45-day extension from the courts.

Contact the writer on priya.shayani@gmail.com.

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