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Sports Authority Bankruptcy to Close 140 Stores, Cut 3.4K Jobs

Image: Sports Authority Bankruptcy to Close 140 Stores, Cut 3.4K Jobs
 (AP)

By    |   Thursday, 03 Mar 2016 06:33 AM

The Sports Authority filed for Chapter 11 bankruptcy on Wednesday, saying it plans to close or sell 140 of its 464 stores and cut 3,400 employees.

The Colorado-based big box sporting goods company laid off 100 people, mostly from its corporate offices, in January, according to the Denver Post. The Sports Authority, which will also close distribution centers and warehouses in Denver and Chicago, said it notified affected workers on Feb. 10.

"We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry," Michael Foss, chief executive, said in a Sports Authority statement on Wednesday.

"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." 

USA Today said the Sports Authority, owned by Los Angeles private equity firm Leonard Green & Partners, is $1.1 billion in debt and did not keep up with customer trends.

The company said it would begin liquidation sales at many of the closing 140 stores on Friday. Sports Authority said store managers and sales people could earn bonuses for staying with the company through the closure, said USA Today.

Jon Schallert, a retail analyst with the Schallert Group Inc., told Post that if the Sports Authority did not make internal changes that affect the way it deals with customers, it could fail all together.

"Historically with retail trends, 90 percent of the time a move like this is usually not enough," Schallert said. "There aren't a lot of retailers these days that are readily going to come in and take over those larger-format stores."

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The Sports Authority filed for Chapter 11 bankruptcy on Wednesday, saying it plans to close or sell 140 of its 464 stores and cut 3,400 employees.
sports authority, bankruptcy, close, stores, cut, jobs
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2016-33-03
Thursday, 03 Mar 2016 06:33 AM
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