After 131 years, bankrupt Modell’s Sporting Goods could soon get a second chance — thanks to a rapidly growing investment firm that is bringing back two other household names: Pier 1 and Dressbarn.
Retail Ecommerce Ventures — through the new subsidiary Modell’s Sporting Goods Online Inc. — emerged as the winner to acquire Modell’s IP assets at an auction last Thursday, according to documents filed on Aug. 7 in the U.S Bankruptcy Court District of New Jersey. A sale hearing is set for tomorrow.
Earlier, Retail Ecommerce Ventures signed an agreement with Modell’s to be the stalking horse bidder, with a purchase price of $1.97 million. It raised the amount to $3.64 million during the auction, according to the documents. The backup bidder is named as IFG Corp.
The assets include Modell’s trademarks, domain names, social media assets and customer transaction data for about 5.6 million customers, as well as the “Gotta Go to Mo’s” jingle.
Nevertheless, going-out-of-business sales continue at more than 100 Modell’s brick-and-mortar stores, which are not part of the deal.
Retail Ecommerce Ventures, led by CEO Alex Mehr and president Tai Lopez, has already inked two other fashion deals. Last year, they bought the IP assets of Dressbarn after Ascena Retail Group closed all of the chain’s stores. (Ascena — parent to Ann Taylor, Lane Bryant, Lou & Grey and Justice — in July filed for Chapter 11 protection in U.S. Bankruptcy Court for the Eastern District of Virginia.)
And after Pier 1 went bankrupt in May and announced plans to shutter all of its stores, that chain also caught the attention of Mehr and Lopez, who paid $20 million for its assets a few months later.
Modell’s filed for Chapter 11 bankruptcy in March after it exhausted all other options.
The family-owned sporting goods chain had tried a number of tactics to stave off bankruptcy, including negotiations with landlords, which yielded some concessions. Amid the company’s struggles, Modell’s chief Mitchell Modell had considered selling a minority stake to save the family business on top of loaning it $6.7 million last year, and the company recently sold its warehouse in the Bronx to raise more money to keep it afloat.