Feb 23, 2016
Sports Authority to file for bankruptcy as early as March
Feb 23, 2016
Sporting goods retailer Sports Authority Inc intends to file for bankruptcy as early as next month, an action that would expedite the closing of some of its 450 stores across the United States, according to three people familiar with the matter.
Sports Authority missed a $20 million coupon payment on Jan. 15, triggering a 30-day grace period to work out a compromise with creditors.
The Englewood, Colorado-based company's bankruptcy plans underscore the challenges the fragmented sporting goods industry faces as it competes with discounter Wal-Mart Stores Inc and online retailer Amazon.com Inc.
Ahead of the bankruptcy filing, Sports Authority is trying to work out a deal with creditors for a loan to get the company through bankruptcy, and line up liquidators for the 150 to 200 stores it plans to close, one of the people said this week.
Sports Authority, owned by private equity firm Leonard Green & Partners LP, declined to comment.
Retailers often take advantage of bankruptcy to shed costly leases for underperforming stores all at once, or sell them. Doing so out of bankruptcy court can be more costly and time consuming.
The company has also been struggling to make payments to suppliers of golf clubs, sneakers and other sporting apparel that stock the stores. Some of the suppliers have been asking for cash upfront out of fear that they will not be paid back.
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