A Massachusetts shoe designer for fashion labels like Ellen Tracy, French Connection, Elie Tahari and other department-store brands has filed for bankruptcy, saying it can’t afford the growing royalty payments owed to brand owners, the Wall Street Journal reported today. Lawyers who put Modern Shoe Co. and an affiliate into bankruptcy protection on Monday said that the companies face roughly $28.2 million in debt, mostly to Chinese manufacturers who fill shoe orders for Saks Fifth Avenue, Macy’s Inc., Bloomingdales, Lord & Taylor and other retailers. Modern Shoe officials told Judge Melvin S. Hoffman that they plan to stop selling Ellen Tracy shoes and proposed using bankruptcy’s contract-cutting power to terminate its licensing agreement with the brand’s owner, Brand Matter LLC. The licensing deal, first made in 2006, doesn’t end until 2021. Modern Shoe’s sales of Ellen Tracy shoes made up $15 million of its $90 million in 2013 revenue, but sales have fallen since Macy’s and Lord & Taylor stores decided to stop selling Ellen Tracy-branded apparel, said Modern Shoe President Kimberly Bradley in documents filed in U.S. Bankruptcy Court in Boston.
