One of the most well-known cariocas brands, Mr. Cat filed an extrajudicial recovery at the Rio Court of Justice (TJ-RJ). The company has debts of R $ 93.270 million. The information was anticipated by columnist Ancelmo Gois.
Founded in 1981, the company today has 200 direct employees and 109 franchised stores that together, total 1,500 employees. The network also has 32 suppliers. The request was distributed on March 17 and there is no court decision yet.
According to the request made by the office KCB Advogados, the company states that the measure is a reflection of the “tireless efforts” to deal with the crisis in the footwear sector. The company recalls that financial difficulties began with the COVID-19 pandemic in 2020 and 2021, which “severely impacted” the segment due to circulation restrictions, social distancing policies and temporary closing of physical stores.
The network also recalled that the interruption of supply chains and the change in consumer patterns led to a 44% drop in sales during 2020 compared to the previous year. Even with the end of the pandemic, the company states that “the economic recovery of the sector was slow, which compromised the evolution of business to the full reversal of the picture.”
“Several factors have contributed to a slower recovery of the sector, and it is certain that changes in social behavior and the economic crisis have altered the demand for non -essential products, such as shoes, as well as the disorder of productive chains generated inflation in inputs, increasing the costs of the final store rents, especially in shopping malls, suffered significant readjustments,” the company said in court.
In this scenario, Mr. CAT also highlighted competition with Chinese companies and the high interest environment in Brazil. He also mentioned that the natural tragedy that occurred in Rio Grande do Sul, one of the main footwear centers in the country, further aggravated the situation of the sector, compromising the production and recovery of the market. The company also mentioned the American Crisis, which, according to her, directly impacted the private credit market, “causing the lines to be more expensive and scarce for national companies.”
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With this, the chain closed several stores, from 173 spaces in January 2020 to 109 until the end of May. The company states that this retraction resulted in an increase in the default of franchisees with Mr. CAT and their licensed suppliers, as well as causing a significant drop in the franchisor’s revenues.
In addition to the closure of stores, the company said it had suffered at a 45% increase in the cost of rent between 2020 and 2021. “Mr. CAT is in a sensitive financial difficulty, not only to immediately honor the commitments already assumed with various suppliers and banks, but, consequently, also to equate their other passives and current costs,” he said.
By justifying its request for extrajudicial recovery, the company claims that, in order to create a favorable environment for maintaining the company in the market in a sustainable and competitive manner, it already has the adhesion of 53.88% of the credits.
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The company also reiterated that it continues negotiating with its creditors, in order to seek greater speed and effectiveness to the measures to implement the plan and payment of their debts, as well as to foster the adhesion of new collaborating creditors. Finally, the network states that it intends to achieve the full financial readjustment of business, with the composition of liabilities to reorganize the company’s activities and solve impasses with creditors.
Creditors include Bocom, Banco do Brasil, Santander, Caixa Federal and Itaú banks, as well as groups linked to malls such as Iguatemi Campinas, Tijuca Shopping, JK Iguatemi and Eldourado Shopping Center.
“It’s the cheapest measure,” says restructuring expert
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According to restructuring expert Rodrigo Gallegos, partner of consulting firm RGF, the company chose the extrajudicial recovery because it has already won the support of creditors with most credits and needed to neutralize the risk of debut expiration of debt.
“In my view it was a right strategy of the company and the office that the advisor. With this percentage of adhesion, the other creditors, especially those difficult to negotiate, are required to choose one of the options of the plan, ie they are dredged for the plan. With the basic rate of very high interest and margins pressed, renegotiating in block is the only way to reconfigure the passive without killing the operation. Who survived the pandemic has been leveraged and without a collective agreement this account does not close. ”
The expert recalls that in general is that one of the difficulties of retail companies is the difficulty of getting new lines of credit.
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“The extrajudicial recoveries we have done recently work because it forces the negotiation even of those who do not accept to talk. It is the cheapest measure, faster and has less bureaucracy than a judicial recovery. So it makes sense to companies that are advanced in negotiations and with more controlled creditors, and it pleases financial institutions given to credit recovery and losses defined,” says Gallegos.
Discharge in requests for judicial recovery
Survey of the RGF & Associados consultancy, responsible for the judicial recoveries monitor, 4,881 companies entered the process of restructuring in the first quarter of this year – larger than 4,203 of the first three months of last year.
After the industry, with 1,112 requests between January and March this year, the services sector leads the judicial recovery processes (1,105), followed by trade (996), infrastructure, energy and sanitation (992), agriculture (341) and other sectors (335).
According to Roberta Gonzaga, RGF consultant and restructuring specialist, 80% of companies that ended their judicial recovery processes in the first quarter of 2025 returned to the active operation.
“Despite the growth in the number of cases, judicial recovery continues to be an effective tool for reorganizing viable companies. The biggest problem is that the company often comes too late to the process, with problems so advanced that they make recovery unfeasible.”
The expectation of the RGF is that the number of restructuring will continue to grow throughout 2025, reflecting the deceleration of the economy and the challenges faced by intensive capital sectors.
