Eastern Outfitters, the parent company of Eastern Mountain Sports and Bob’s Stores, has filed for Chapter 11 protection in Delaware.
According to court documents, filed on Feb. 5, U.K.-based mega sporting goods chain Sports Direct LLC has reached an agreement with the firm to become a stalking horse bidder at an upcoming bankruptcy auction.
In its bankruptcy filing, Eastern Outfitters lists the value of its assets at between $100 million and $500 million and says its liabilities roughly equal that same amount.
Last April, Vestis Retail Group LLC, then-owner of outdoor retailer EMS, Bob’s and Sport Chalet, filed bankruptcy and shuttered the Sport Chalet business altogether. After closing eight EMS locations and one Bob’s location due to high real estate costs, the company turned over EMS and Bob’s to funds advised by Versa Capital Management LLC, the Philadelphia-based private equity firm that owned Vestis. Versa then created the entity Eastern Outfitters to house both chains.
High real estate costs, increased competition from e-commerce and consumer shifts toward experiential spending have recently taken a hefty toll on several major retailers. Last year, leading sporting goods retailer The Sports Authority filed for bankruptcy and ultimately shuttered all doors. Teen mall staples Aéropostale Inc. and Pacific Sunwear of California Inc. — doing business as PacSun — also sought Chapter 11 protection in 2016. (Aéropostale and PacSun were able to restructure and emerge from the bankruptcy process with a leaner store count and the ability to forge ahead with their operations.)
And, in just the past two weeks, Irving, Calif.-based clothing and accessories seller Wet Seal and Dallas-based running and fitness store Luke’s Locker added their names to the bankruptcy court docket.
Retailers are not the only ones feeling the pressure from a bankruptcy-laden landscape. Brands have also taken substantial losses over the past year as their vendor partners go belly up. (For example, Under Armour said last year that it had originally planned to bring in $163 million in revenues from Sports Authority in 2016 but would only recognize $43 million after the chain shut down.)
Among the creditors holding the largest unsecured claims from Eastern Outfitters are VF Corp. (which is owed $769,000), Wolverine World Wide Inc. (due $636,000) and Under Armour (owed $582,000).