With the dust just beginning to settle surrounding the bankruptcy and 140-store closure of sporting goods retailer Sports Authority, another, albeit smaller, outdoor gear retailer is following suit. Vestis Retail Group, the operator of brand Eastern Mountain Sports, Bob’s Stores, and Sport Chalet, officially filed bankruptcy papers today, outlining a restructuring plan that focuses on closing 56 stores.
Bloomberg reports that Vestis Retail Group, owned by private equity firm Versa Capital Management LLC, is citing consumers’ changing shopping preferences and its failure to properly respond as reasons for the filing.
“The continuing shift in consumer behavior away from traditional brick-and-mortar retailers and toward online-only stores, together with increased competition from big-box and specialty sporting goods retailers, have contributed to an industrywide weakness,” Mark Walsh, chief executive officer of Vestis, said in a court filing.
The three retail stores focused on specific segments of the outdoor world, with Eastern Mountain selling camping equipment and gear for hiking, skiing and adventure sports; Bob’s centered on family clothing and footwear in the northeastern U.S.; and Sport Chalet operating as a general sporting good chain in the western U.S.
The retail group also noted that the recent demise of Sports Authority contributed to the company’s eventual downfall.
“Ongoing store-closing sales at certain Sports Authority locations have created unusual competition,” Walsh said in court papers, which also cited unusually warm weather in the northeastern U.S. last year that hurt winter-gear sales and trouble converting to a new software platform as contributing factors.
Under the company’s restructuring plan it will close all 47 Sport Chalet stores, as well as one Bob’s store in Oregon and eight Eastern Mountain Sports stores around the country.
According to the Chapter 11 bankruptcy petition, Vestis Retail has as much as $500 million in liabilities and less than $50,000 of assets.
The company’s assets will reportedly remain with the Versa family, with Vestis BSI Funding II agreeing to buy nearly all of the remaining assets.
Vestis will seek approval of a court-supervised auction process with the BSI offer as the opening bid, Bloomberg reports.
Eastern Mountain in Bankruptcy as Shopping Habits Change [Bloomberg]
by Ashlee Kieler via Consumerist
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