Sports Authority Inc. is making progress as it drudges its way through bankruptcy proceedings.
The struggling sporting goods retailer has reached a settlement — still subject to approval by the bankruptcy court — with more than 160 vendors who sought to have their goods removed from the retailer’s shelves.
After Sports Authority filed for Chapter 11 bankruptcy protection on March 2, tensions between the retailer and several vendors quickly surfaced. According to documents filed in Delaware’s bankruptcy court, the vendors had requested to have to not only their goods removed from Sports Authority stores, but they also wanted their items promptly returned. Sports Authority had countered the requests by filing lawsuits against the vendors.
In court documents filed on April 1, Stephen Binkley, Sports Authority Holdings EVP and chief merchandising officer, said that the firm needed to sell the goods, estimated to generate a maximum of $85 million in sales (at full-price), in order to “preserve and maintain their business as a going concern and maximize value for stakeholders at a critical time in the Chapter 11 cases.”
The proposed settlement in the case, if approved, would allow Sports Authority to continue to sell the goods — allowing for restocking as well — on which the vendors would receive 60 percent of the sales.
Sports Authority is in the process of liquidating about of its 140 stores as it restructures. Dick’s Sporting Goods Inc. and Modell’s are among the firms expected to benefit from the retailers challenges.