Sterling Shoes Inc.

May 22, 2012 18:10 ET

Sterling Shoes Announces Closing of Sale to Town Shoes

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 22, 2012) - Sterling Shoes Inc. ("Sterling") is pleased to announce that, further to its press release dated April 16, 2012, its wholly-owned subsidiary, Sterling Shoes GP Inc. ("Sterling GP"), the general partner of Sterling Shoes Limited Partnership ("Sterling LP"), and Sterling LP have successfully completed the sale of the majority of the assets of Sterling LP including 69 of Sterling's retail locations operating under the Sterling Shoes, Shoe Warehouse and Freedman banners to Town Shoes Limited ("Town Shoes") for a purchase price of approximately $17.5 million, subject to certain post-closing adjustments (the "Transaction"). The Transaction was completed pursuant to a purchase agreement dated as of April 16, 2012 among Sterling GP, Sterling LP, Town and Alvarez Marsal Canada Inc. (the "Monitor" or "A&M"), in its capacity as the court appointed monitor pursuant to Sterling's proceedings under the Companies' Creditors Arrangement Act (the "CCAA").

Pursuant to the Transaction, Sterling sold to Town its assets in respect of the businesses carried out by Sterling at certain premises leased by Sterling including: the related goodwill and intangible assets, inventory, contracts, intellectual property rights, pre-paid amounts and receivables.

"We are pleased to have completed this transaction with Town Shoes. This transaction presents the best possible outcome for the business," said Dave Alves, President and CEO of Sterling Shoes LP. "By leveraging the core strengths of the unified organizations we create significant opportunities for the business, employees and ultimately the customer. As a collective portfolio of Freedman Shoes, Shoe Warehouse, Sterling Shoes, The Shoe Company, and Town Shoes, we are excited to be a part of the largest branded footwear retailer in Canada."

Alan Simpson, CEO of Town Shoes said, "We are very excited to welcome Sterling to the Town Shoes family. Combining the operations of Town Shoes and Sterling will increase our position as the #1 branded footwear retailer in Canada. Together we will be able to deliver more value to our customers, enhance our relationship with our suppliers, and increase opportunities for advancement for our staff."

As previously announced, pursuant to orders of the Court made under the CCAA, Sterling was granted certain protections under the CCAA. All inquiries regarding the CCAA proceedings affecting Sterling should be directed to the Monitor at www.alvarezandmarsal.com/sterling or by contacting Tom Powell of A&M at: (+1) 604-639-0846. Capital West Partners acted as financial advisor to Sterling in connection with the Transaction.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release, including statements regarding the timetable completion of the Transaction, results of the Transaction for the Business, obtaining approval of the Court, may constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. The forward looking statements contained herein are based on certain assumptions including assumptions regarding our objectives and priorities for the remainder of 2012 and beyond, our strategies or future actions, our targets, expectations for our financial condition and the results of, or outlook for, our operations. When used in this press release, such statements often use, but are not limited to, such words as "may", "will", "expect", "should", "believe", "intend", "plan", "anticipate", "potential", and other similar terminology. Although the forward-looking statements contained in this press release are based upon management's reasonable assumptions, Sterling cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release and Sterling assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

For further information, please visit us at www.sterlingshoesinc.com.

Contact Information

  • Sterling Shoes Inc.
    Daniel S. Gumprich
    Chief Financial Officer
    (604) 270-6114
    (604) 278-7751 (FAX)
    www.sterlingshoesinc.com