Long one of Russia’s top sellers of mid-priced shoes, the company was unable to make necessary shifts to keep up with online demand and suffered from both falling foot traffic and rising costs after its founder’s death.

The size of Paolo Conte’s debt to primary creditor, Sberbank, has not been disclosed.

Andrey Rotar founded Paolo Conte in 2001 and died last year. In 2019, the retailer was Russia’s sixth largest mid-price shoe retailer with 81 stores and in 2020 Paolo Conte’s group revenue reached 1.8 billion roubles ($23 million).

Following Rotar’s death, however, creditors came calling, insisting the retailer pay off its debts. This caused a cash crunch that led to missed rent payments and store closures.

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Russian Retailer OR Group Defaults on $7 Million Bond Repayment

The shoe retailer and e-commerce marketplace owner has defaulted on bonds valued at 592 million roubles ($7.7 million), 99 percent of which are held by Moscow-based Promsvyazbank (PSB).