Sports Authority intends to file for bankruptcy as early as next month. The move would reportedly lead to the closing of some of its 450 stores across the United States.
According to Reuters, sporting goods retailer, Sports Authority Inc. plans to file for bankruptcy as early as next month. This is an action that would expedite the closing of a few of its 450 stores across the U.S., according to three sources familiar with the matter.
Sports Authority missed the $20 million coupon payment on January 15. This reportedly triggered a 30-day allotment period to work out a negotiation with the creditors.
CNBC claimed that Colorado-based company, the Englewood, claims that bankruptcy plans highlights the challenges of the fragmented sporting goods industry. Sports Authority also competes with discounter Wal-Mart Stores Inc. and online retailer Amazon as it plans out its bankruptcy declaration.
The retailers often also take advantage of the bankruptcy filing in order to shed off some costly leases for its underperforming stores all at once, or sell them. By following this move, out of bankruptcy the court can be more costly and time consuming.
However, prior to the filing of the bankruptcy, the Sports Authority is trying to work out some deals with creditors for a loan to get the sporting goods company out of bankruptcy. This will also make line up liquidators for the 150 to 200 stores as it plans to shut down, one of the sources stated just this week, as reported by Dudetimes.
Sports Authority has also been struggling to make payments to suppliers of golf clubs, sneaker, and other sporting apparel that stock the stores. A few of its suppliers are also still asking for cash up front.
Meanwhile, Sports Authority's suppliers fear that the company will not pay them back, especially that the month set for the announcement of the bankruptcy is fast approaching. The company, which is possessed by exclusive solution Leonard Environment-friendly & Partners, turned down to comment.
