After months of speculation and a missed $20 million debt payment in January, Sports Authority Inc. has filed for Chapter 11 bankruptcy protection.
The sporting goods retailer, which has felt the pressure of competition from brick-and-mortar giant Dick’s Sporting Goods and e-tailing behemoth Amazon, said today that it will close or sell 140 of its 463 stores as well as two distribution centers, in Denver and Chicago, in the coming months as it restructures.
In conjunction with the Chapter 11 filing, the company said it expects to have access to up to $595 million in debtor-in-possession financing.
Documents filed in the District of Delaware Bankruptcy Court reveal that the company estimates that its assets are worth less than $50,000 while its liabilities total between $1 million and $10 million.
“We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry,” Sports Authority CEO Michael Foss said in a release. “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.”
Watch on FN
The Englewood, Colo.-based firm said it has been working with its outside financial advisers over the past several months to conduct a review of its business and evaluate its options.
“Given our strong brand recognition with a large and growing customer base, valuable business assets and loyal team members, we have received strong interest from third parties interested in investing in or buying some or all of Sports Authority,” Foss said. “We intend to continue evaluating all options to maximize the value of the organization and position us for sustainable success in our industry. As it has been from the beginning of the strategic business review process, our primary objective is doing what is in the best interests of our employees, customers, suppliers and creditors.”
The company said it has asked the court for authorization to continue paying employees’ wages, salaries and benefits and to continue its various customer programs without any change. Court approval for those requests is expected within the next day or two.