When Sports Authority filed for bankruptcy protection last month, the company hoped that it might be able to survive the process, re-organizing its debts and keeping some of its stores open. Today in bankruptcy court, a company attorney told the judge that Sports Authority will not continue, and there are prominent but unnamed companies that may purchase some of the chain’s remaining 300 or so stores. The bankruptcy auction will be on May 16.
It’s possible that selling the stores could keep them open and keep some retail workers employed. However, the sporting goods retail business is not one that most companies would be interested in pursuing right now. Competitors might be interested in buying stores to expand into areas where they don’t have a presence, but they could also buy stores just to close them and eliminate their local competition.
Liquidators will also be bidding, and their goal is simple: to sell the store’s inventory and fixtures and get as much money for them as possible. Sports Authority would prefer to sell a large number of stores to a single owner that will keep them open, but that will depend on how the bidding goes.
Sports Authority already announced that it would close and liquidate the contents of 140 of their stores across the country. The sale of merchandise and leases from those stores, along with the offers it has received for remaining stores before official bidding begins, come to about $100 million. The company has more than $1.1 billion in debt.
Sports Authority Abandons Hope of Reorganizing and Opts for Liquidation [Wall Street Journal]
by Laura Northrup via Consumerist
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