ENGLEWOOD, CO—Sporting goods retailer Sports Authority said Wednesday it had filed for a Chapter 11 restructuring in US Bankruptcy Court for the District of Delaware. Under the restructuring plan, the company has identified about 140 of its 463 stores and two distribution centers that it plans to close or sell; court documents reveal that it may also shutter up to 200 more.
The retailer, which was widely expected in recent weeks to file for Chapter 11, said the store closings plan resulted from “a comprehensive review of the Sports Authority store portfolio in light of the increasing amount of shopping that is occurring online. As a result of these changes in consumer buying patterns, Sports Authority determined that it needs fewer stores as part of its long-term business model.” To that end, the company has requested permission to begin store-closing sales immediately.
CEO Michael Foss says the company has filed for voluntary bankruptcy “so that we can continue to adapt our business to meet the changing dynamics in the retail industry. We intend to use the Chapter 11 process to streamline and strengthen our business both operationally and financially so that we have the financial flexibility to continue to make necessary investments in our operations.”
He adds that “we have received strong interest from third parties interested in investing in or buying some or all of Sports Authority. We intend to continue evaluating all options to maximize the value of the organization and position us for sustainable success in our industry. “
In conjunction with the Chapter 11 filing, Sports Authority expects to have access to up to $595 million in debtor-in-possession financing. Subject to bankruptcy court approval, the DIP financing, combined with the company's cash from operations, is expected to provide sufficient liquidity during the Chapter 11 process.
The Sports Authority bankruptcy filing is the latest in a series that in the past several months has included RadioShack and West Seal. In an interview Wednesday with Bloomberg Business, Howard Davidowitz, chairman of Davidowitz & Associates, declined to identify what retailer was likely to follow Sports Authority into bankruptcy. However, he told Bloomberg, “There's about eight retail companies out there with their bonds selling at pennies on the dollar.” He predicted that “most of them will be gone this year.”
ENGLEWOOD, CO—Sporting goods retailer Sports Authority said Wednesday it had filed for a Chapter 11 restructuring in US Bankruptcy Court for the District of Delaware. Under the restructuring plan, the company has identified about 140 of its 463 stores and two distribution centers that it plans to close or sell; court documents reveal that it may also shutter up to 200 more.
The retailer, which was widely expected in recent weeks to file for Chapter 11, said the store closings plan resulted from “a comprehensive review of
CEO Michael Foss says the company has filed for voluntary bankruptcy “so that we can continue to adapt our business to meet the changing dynamics in the retail industry. We intend to use the Chapter 11 process to streamline and strengthen our business both operationally and financially so that we have the financial flexibility to continue to make necessary investments in our operations.”
He adds that “we have received strong interest from third parties interested in investing in or buying some or all of Sports Authority. We intend to continue evaluating all options to maximize the value of the organization and position us for sustainable success in our industry. “
In conjunction with the Chapter 11 filing, Sports Authority expects to have access to up to $595 million in debtor-in-possession financing. Subject to bankruptcy court approval, the DIP financing, combined with the company's cash from operations, is expected to provide sufficient liquidity during the Chapter 11 process.
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