Sports Authority filed Chapter 11 bankruptcy protection on Wednesday, and the big-box store plans to sell or close roughly 140 stores nationwide.
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CNN Money reported that industry analysts have predicted the bankruptcy filing since January after the athletic apparel retailer revealed it was delinquent on a $20 million debt payment and entered negotiations with several lenders.
In a letter to customers posted on the company’s website, Foss said Sports Authority’s long-term plan includes upgrading stores and improving its website. The store closings will take place over the next three months. The retail chain has 463 stores across the country, including the Stockton store and one in Modesto.
The Hampton Sports Authority location is about 10 miles away from the nearest Dick’s Sporting Goods location at Patrick Henry Mall in Newport News.
In the statement, Sports Authority describes the terms of a $595 million in debtor-in-possession financing agreement administered by Bank of America to supplement operating revenue during the Chapter 11 restructuring process. The company’s website will continue to function as well.
CEO Michael Foss said in a statement that the decision was not easy, but an essential step to make Sports Authority a considerably better company for customers, employees, and vendors.
The company has 14,500 full- and part-time employees at its 450 stores and its offices, according to the bankruptcy filing.
He said the store can not tap the occasional consumers “either as it’s cheaper and more convenient for them to shop online or at rivals”.
According to Reuters, Sports Authority asked for Bankruptcy Court approval to hire liquidators. The recurrent turnover in its leadership and a history of mergers were also some of the reasons to blame in the company’s bankruptcy.
A few more stores in greater Central Florida are also slated to close. In court papers outlining its reorganization strategy, Sports Authority said it will proceed cautiously when trying to sell assets, in order to preserve $124 million in tax reductions.
“Customers and others had long complained that Sports Authority’s shopping experience was drab and outdated”, writes Jacob Bogage for the Washington Post.
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The company said it would begin liquidation sales at numerous closing 140 stores on Friday.
