Franchising, retail, business
02/03/2016
NEW YORK — Sports Authority is filing for Chapter 11 bankruptcy protection to try to fix its business as it pays off $1.1 billion in debt.
The retailer said Wednesday that it plans to close or sell about 140 stores and two distribution centers, in Denver and Chicago.
Sports Authority stores will remain open and run on normal schedules during the Chapter 11 process.
The company is also laying off 3,400 employees, or about one-third of its staff, all of whom were notified on February 10, according to the Denver Post.
"We wanted to give them plenty of time to find their next opportunity, whether it's in the company, or wherever else it is," Foss said. "It is hard to close a store or a distribution center, or right-size a corporate headquarters. We try to mitigate the impact on people as much as possible."
The Englewood, Colorado, company has 463 stores in 41 states and Puerto Rico. The store closings are expected to take up to three months.
The company's website will continue to function, and the chain plans to honor warranties on items purchased at its stores or online.
"We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry," CEO Michael Foss said in a written statement. The executive said that it needs fewer stores as consumers are increasingly shifting to online shopping.
Retailers struggling
The retail industry as a whole has struggled with the consumer move to online shopping, trying to find ways to lure customers to brick-and-mortar stores instead. Macy's Inc. has opened Macy's Backstage, in order to go head to head with discount retailer T.J. Maxx.
And J.C. Penney is using store-label offerings to fight against pricing pressures from online rivals and recently launched a new campaign called "Get Your Penney's Worth," which offers certain store-label items for pennies.
In a letter to customers posted on the company's website, Foss said that Sports Authority's long-term plan includes upgrading stores and improving its website.
Foss said that The Sports Authority, which is privately-held, has received interest from third parties that may want to invest in or buy some or all of the business. The company plans to continue evaluating all of its options, he added.
Sports Authority said that it expects to have sufficient cash to function during the Chapter 11 process when factoring in cash from operations and anticipated access to up to $595 million in debtor-in-possession financing.
Sports Authority made its Chapter 11 filing in the United States Bankruptcy Court for the District of Delaware.
Fonte:http://mashable.com/2016/03/02/sports-authority-declares-bankruptcy/#3OZPQ2anzsqU
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