Popular footwear chain closes most stores, no bankruptcy

The retail market has always been challenging, but the current situation has made simply existing a struggle for many retailers.

Labor costs have increased at the same time that economic uncertainty has made it difficult to raise prices. That means that many companies have been forced to eat the higher costs of goods needed to manufacture their merchandise.

Related: Beloved American toy company sends harsh message to workers

Add in the looming uncertainty of President Donald Trump's tariffs, along with the supply-chain chaos they have caused, and it makes a daunting business sometimes an impossible one. 

When retailers see their margins cut, a dip in sales can be fatal. In addition, some businesses, including footwear, have had trouble figuring out what model works. Even huge players like Nike have struggled to find the right mix of retail, wholesale, and direct-to-consumer (DTC).

Big players, however, can afford to experiment. If Nike tilts its balance a little to much to a DTC model, it has the resources to shift back or try something else.

Smaller players don't have that luxury, and bad bets, small strategic mistakes, and other little errors can pile up. That's what has happened to one well-loved footwear company, which has closed most of its stores, abandoned its headquarters, and entered a fight for survival.

Freebird is a major player in boots

Devoting your business to a niche product requires being very good at what you do. Selling boots is a very specialized business, and Freebird succeeded in that space for a very long time. 

The company described its journey on its website:

"Our company was born out of a love for boots. We set out to create an original design to make your boots as unique as you are. Producing each pair using the time-honored goodyear welt craftmanship, combining quality with fashion. So once you put on a pair of Freebird boots you feel like you can conquer anything. You are unique and should always stand out from the crowd," it posted.

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Using the name Freebird was obviously a conscious choice to evoke the emotions that come when hearing Lynyrd Skynyrd song "Free Bird."

That's one of the most popular songs of all time, and it means different things to different people, but it's an anthem for making your own choices. Embracing that name tells consumers a lot about what the company hopes to achieve.

Freebird has closed most of its stores 

Freebird unexpectedly closed 14 of its 20 stores and abandoned its Colorado headquarters. The company has been run since May by court-appointed caretaker Ampleo, since being sued by KeyBank for allegedly not repaying $15.4 million.

“The receiver learned in the first few days that the company remains in a precarious financial situation” and “a severe liquidity crisis,” Ampleo’s Doug Charboneau wrote June 9.

"That includes owing $6 million to a manufacturer in Mexico that supplies 85% of its shoes," the Denver Post reported.  

That supplier has ceased its operations due to the unpaid invoices, leaving Freebird in an even more precarious position.

"Ampleo works with, or in place of, existing management in urgent and high-impact situations. Our skilled team works with you through the entire insolvency continuum including turnaround management, out-of-court restructurings, receiverships, and bankruptcy court proceedings. We represent both debtors and creditors and often act as court-appointed fiduciaries," the company shared on its website. 

The process of closing 14 stores has already begun. If a buyer is not found quickly, four more stores will be closed, leaving the chain with two locations and limited options to supply those stores. 

Related: Huge retail chain suddenly closing 100s of stores, no bankruptcy

Ampleo currently has two companies in active negotiations to buy the brand.

If those efforts fail, it will move toward full liquidation and perhaps a bankruptcy filing (although one may not be needed, as the current management is working with Key Bank, the key debtor). 

All sales made at Freebird stores or on its website are final with no returns.