The Sports Authority’s bankruptcy plans have changed. It seems the athletic retailer is looking to sell off its business, rather than restructure and reorganize its debt.
As first reported in the Wall Street Journal, the lawyers on Tuesday told a judge in court that the debt-laden chain will seek a buyer going forward. In the WSJ report, Sports Authority lawyer Robert Klyman told a judge in Delaware bankruptcy court during proceedings, ”It has become apparent that the debtors will not reorganize under a plan but instead will pursue a sale.”
The Englewood, Colo.-based firm filed for bankruptcy in March and is saddled with around $1.1 billion in debt, millions of which are owed to major athletic brands and has left landlords frustrated over unpaid rent. According to reports, Sports Authority changed approach after it become evident that the firm couldn’t reach a deal with other parties.
The company is one of a series of athletic players that have struggled to stand on its own against the likes of Dick’s Sporting Goods, Amazon and big-box stores. The Sports Authority closure may be one of the biggest reverberating closures in the sports retail market, with a presence across the country.
Analysts told Footwear News last week that the athletic retail category was undergoing a long-overdue right-sizing. As regional brands such as City Sports and Sports Chalet shutter, analysts expect the stores left standing to get better at servicing the consumer and leave opportunity for brands to establish more of their own stores.