Modell’s Sporting Goods is reportedly preparing to file for bankruptcy this weekend.
According to The New York Post, the struggling retailer has halted its search for a white-knight investor to renegotiate its stores’ leases. It could potentially file for Chapter 11 protection as soon as Sunday, added the report.
In recent years, Modell’s has been plagued by financial difficulties. CEO Mitchell Modell has 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.
FN has reached out to Modell’s for comment.
What We Reported (Feb. 27, 2020): Modell’s Rescues Two More Stores From Near-Closure, Saving Nearly 50 Jobs
Modell’s Sporting Goods has now managed to rescue seven of the 24 stores it slated for closure late last week.
CEO Mitchell Modell today announced that two stores would be saved from closure, along with 48 jobs. Those two locations come in addition to the five doors and 81 jobs that were preserved by the family-owned sporting goods chain earlier this week. Modell’s was able to avoid shuttering the seven total outposts after renegotiating leases with landlords.
In recent years, Modell’s has been plagued by financial difficulties: A WSJ report earlier this month indicated that the firm had hired financial advisers to help rein in challenges. CEO Modell told the publication that the company had ceased payments to a number of its landlords and vendors, as well as begun negotiations with suppliers to remedy the situation.
As the CEO fights to save the family business, he is considering selling a minority stake in the company, he told Fox Business on Monday.
“We will do whatever it takes to save these stores and protect the communities that we have served and loved for generations,” Modell said. “This is not a business, and these are more than associates.”
This isn’t the first time Modell’s has teetered on the brink of bankruptcy: In March 2019, the firm hired a restructuring adviser after a period of soft sales and heavy competition from big-box and online stores. It narrowly avoided going bankrupt after its CEO provided $6.7 million in fresh capital.
Modell’s is among a growing list of sporting goods purveyors that have felt the pressures of an evolving retail environment in recent years. Grand Rapids, Mich.-based MC Sports filed for Chapter 11 protection in 2017; Sports Chalet announced it would close its doors in April 2016; Sports Authority declared bankruptcy in March 2016; and City Sports went out of business in late 2015.
Retail Store Closures: All the Companies That Are Downsizing in 2020