Sports Authority filed for bankruptcy on Wednesday after the company found itself saddled with mountains of debt and unable to upgrade their stores. The company stated that they plan on selling or closing at least one third of their stores, including 6 in California.
In a statement, the company says that they believe that this move will allow the company to change and adapt to the new dynamics of a rapidly changing economy that includes e-commerce sales. The company currently has 463 stores in 43 states, as well as distribution centers in both Denver and Chicago. Sports Authority will sell or close 140 stores and the two aforementioned distribution centers in the next 3 to 4 months.
A&G Reality Partners is handling the sales and they state that 87 of the 140 chosen locations already have leases listed for sale. The company is selling all 6 of their California stores and is leaving the state of Texas, listing all 25 of their stores there for sale as well. The company is also selling 8 stores in Florida. With e-commerce sales increasing, Sports Authority states that they no longer need as many brick and mortar locations.
CEO Michael Foss stated that the Chapter 11 bankruptcy process will give the company the flexibility they need to make the necessary changes to improve their overall operations.
The company was acquired in 2006 by the Los Angeles private equity firm Leonard Green and Partners. The company took on a great deal of debt at that time and have had a difficult time servicing the debt.
Sports Authority was unable to take advantage of the thriving sporting goods market due to a lack of funding. Millennials are very interested in health and fitness. Many competitors have installed rock wall climbing equipment and putting greens to help encourage customers to visit stores and try out equipment before they buy it. Sports Authority has not had the funding, due to their heavy debt load, to remodel their stores.
The remaining Sports Authority stores are expected to stay open and operate normally while the company undergoes the bankruptcy process.
Source: The Los Angeles Times
xSports Authority filed for bankruptcy on Wednesday after the company found itself saddled with mountains of debt and unable to upgrade their stores. The company stated that they plan on selling or closing at least one third of their stores, including 6 in California.
In a statement, the company says that they believe that this move will allow the company to change and adapt to the new dynamics of a rapidly changing economy that includes e-commerce sales. The company currently has 463 stores in 43 states, as well as distribution centers in both Denver and Chicago. Sports Authority will sell or close 140 stores and the two aforementioned distribution centers in the next 3 to 4 months.
A&G Reality Partners is handling the sales and they state that 87 of the 140 chosen locations already have leases listed for sale. The company is selling all 6 of their California stores and is leaving the state of Texas, listing all 25 of their stores there for sale as well. The company is also selling 8 stores in Florida. With e-commerce sales increasing, Sports Authority states that they no longer need as many brick and mortar locations.
History
CEO Michael Foss stated that the Chapter 11 bankruptcy process will give the company the flexibility they need to make the necessary changes to improve their overall operations.
The company was acquired in 2006 by the Los Angeles private equity firm Leonard Green and Partners. The company took on a great deal of debt at that time and have had a difficult time servicing the debt.
Sports Authority was unable to take advantage of the thriving sporting goods market due to a lack of funding. Millennials are very interested in health and fitness. Many competitors have installed rock wall climbing equipment and putting greens to help encourage customers to visit stores and try out equipment before they buy it. Sports Authority has not had the funding, due to their heavy debt load, to remodel their stores.
The remaining Sports Authority stores are expected to stay open and operate normally while the company undergoes the bankruptcy process.
Source: The Los Angeles Times