Retail sporting goods giant Sports Authority has filed for Chapter 11 bankruptcy protection. The chain announced that it will shutter their Chicago and Denver distribution centers and shutter 140 locations over the next 90 days. Sports Authority indicated it is attempting to restructure its debt.
Sports Authority stated that it has enough liquidity to remain operational. During the Chapter 11 process, the retailer will continue normal business operations, maintain its website and honor all product warranties. In a statement released by CEO Michael Foss, “We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry.” To stay competitive, Sports Authority must reduce its brick and mortar presence, Foss said, as consumers are shopping more online.
The retail sector, plagued by the consumer migration to online shopping, is stymied in its attempt to attract consumers to their retail locations, in 41 states and Puerto Rico. Discount retailer TJ Maxx is facing competition from the introduction of Macy’s Backstage. JC Penny is going the private label route, with its “Get Your Penney’s Worth” campaign, to combat online discount retailers. Sports Authority competitor City Sports, impacted by a shift in consumer buying patterns, filed for Chapter 11 bankruptcy protecting in October 2015.
In a letter appearing on the Sports Authority website, CEO Foss addressed Sports Authority’s vision for the future. The chain plans to upgrade its remaining brick and mortar locations and revamp its website. Foss commented there has been interest from outside investors to acquire the privately held firm. He stated Sports Authority will explore all options. Sports Authority filed for bankruptcy protection in the United States bankruptcy court in Wilmington, Delaware.
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