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Sports Authority files for Chapter 11

Published March 2, 2016
Retailer points to online shopping and changing consumer buying patterns for restructuring.

ENGLEWOOD, Colo. (BRAIN) — National sporting goods retailer Sports Authority has filed to restructure under Chapter 11. The move has been several months in the making, and reports of the company’s pending bankruptcy had come out in recent days.

The retailer said it expected the restructuring would provide access to $595 million in financing. That along with cash from operations would provide liquidity to restructure.

Sports Authority, headquartered in Englewood, Colorado, said the majority of its stores and its website would remain open. However, it plans to close or sell 140 stores and two distribution centers in Chicago and Denver in the coming months as part of the restructuring. The company currently operates 463 locations across 41 states and Puerto Rico.

It sells a broad range of sporting equipment including bikes, helmets, cycling shoes, apparel and other accessories from such brands as Diamondback, Mongoose, Schwinn, Pacific Cycle, Giro, Bell, CatEye, Blackburn, Canari, Thule and others.

The retailer said the decision follows a strategic review of its business and the impact of online shopping. The process will allow it to shore up its finances. 

“As a result of these changes in consumer buying patterns, Sports Authority determined that it needs fewer stores as part of its long-term business model,” the retailer stated. “Therefore, the company has filed a motion with the court seeking approval to proceed with store closing sales at the identified stores, after which those stores are expected to be closed or sold. The store closing process is expected to take up to three months.”

“We intend to use the Chapter 11 process to streamline and strengthen our business both operationally and financially so that we have the financial flexibility to continue to make necessary investments in our operations,” CEO Michael E. Foss said in a press release. “We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry.”

Foss said that there’s “strong interest” from third parties in investing in or buying some or all of the company. 

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