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TOMS Shoes Struggling

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TOMS Shoes, LLC has been shifting sales to its direct-to-consumer Toms.com website as it looks to survive the disruption roiling the retail industry, according to people familiar with the matter, the WSJ reported. The Company is still struggling with declining sales and profits in brick-and-mortar stores and third-party online platforms while it services $306 million in debt, the people said. Much of the debt is a remnant of Bain Capital’s 2014 purchase of a 50% stake and as well as pressure on margins and sales at brick and mortar retail stores, the people said. The Company has recently had some success drawing customers away from brick-and -mortar outlets—particularly discount retailers—to its more profitable Toms.com website, the people said. The Company’s online sales topped 30% of total revenues in the second half of last year, the people said. Despite the progress Toms has too much debt, nearly 10 times its earnings before interest, taxes, depreciation and amortization (Ebitda), one of the people said. Read more on distressed companies.

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