Another distressed retail chain files for Chapter 11…

Another distressed retail chain files for Chapter 11 bankruptcy

The sporting goods retail segment has been plagued with bankruptcy filings, store closures and liquidations from major retailers in recent years and the shakeout continues.

Sports Authority, which had 463 stores nationwide, was a major loss to the industry when it filed for Chapter 11 bankruptcy in 2016 and eventually liquidated all of its assets. Competitor Dick's Sporting Goods (DKS) , which is now the largest chain operating over 850 stores, bought the Sports Authority brand name and intellectual property in a bankruptcy sale.

Dick's purchased another sporting goods store out of bankruptcy in 2016 as well when it acquired golf specialty retailer Golfsmith for $69 million.

Regional sporting goods retail chain Sport Chalet, which operated 47 stores in California, Arizona, Nevada and Utah, also filed Chapter 11 bankruptcy in 2016 and it, too, closed all of its stores and liquidated.

Another regional sporting goods retail icon, Modell's, which operated 153 stores in the Northeast and Mid-Atlantic states, filed for Chapter 11 protection on March 11, 2020, just as the Covid-19 pandemic was starting to shut down businesses across the country.

Modell's began store closing sales on March 13, 2020, but shortly after starting going-out-of-business sales, the pandemic forced the chain to stop the sales and shut down operations. The sporting goods chain finally reopened its liquidation sales in late June 2020.

Maine-based Olympia Sports, which operated 70 stores in the U.S., in September 2022 filed for Chapter 11 bankruptcy, asserting that negative effects from the Covid-19 pandemic and a failed e-commerce platform caused its demise.

Bob's Stores at 499 Sunrise Highway in Patchogue, N.Y., on Dec. 31, 2019. (Photo by Thomas A. Ferrara/Newsday RM via Getty Images)
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Mountain Sports to reorganize and restructure debt in Chapter 11

Mountain Sports, which operates about 50 sporting goods and apparel stores in seven Northeast states under the Eastern Mountain Sports and Bob's Stores brands, on June 18 filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware to restructure its debt and reorganize its business after defaulting on a loan agreement with PNC Bank.

More bankruptcy:

The Meriden, Conn.-based retail chain owner owes PNC $29.4 million under a revolver and first-in-last-out facility and had been current on its payments through the petition date, according to a declaration from CEO David Barton. PNC holds first-priority security interest in the debtor's inventory, receivables, deposit accounts, and proceeds.

Mountain Sports also owes $26.6 million in unsecured claims. The debtor's largest unsecured creditors include Yell Steel Enterprise, owed $472,335; Smartwool Corp., owed $455,290; Oboz Footwear, owed $432,147; Marmot Mountain International, $353,647; and North Face VF Outdoor, owed $322,581.

The company generated $131.85 million in net revenue in the 2023 calendar year, according to the declaration and employed about 771 full- and part-time workers as of the petition date.

The company has operated out of its corporate headquarters and distribution center in Meriden, but the company determined in a restructuring process that it can operate from its larger stores and is in the process of vacating its distribution center. The company already laid off 150 workers at its Meriden location before filing bankruptcy.

Eastern Mountain Sports, or EMS, markets itself to the "adventurer looking for reliable and functional outerwear and gear at a value price," Barton wrote in his declaration. "Bob's targets moderate-income customers with a selection of footwear, workwear, teamwear and activewear."

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