Sports Authority Files For Bankruptcy, Plans To Close 140 Stores
ENGLEWOOD, Colo. (CBSNewYork/CBS Denver/AP) -- Sports Authority has filed for Chapter 11 bankruptcy protection and will close or sell 140 stores.
The retailer said Wednesday that it will also close two distribution centers, in Denver and Chicago. The Englewood, Colorado, company has 463 stores in 41 states and Puerto Rico.
The store closings are expected to take up to three months, CBS Denver reported.
The closures will take place over the next three months.
The Wall Street Journal reported several Tri-State Area stores will be among those closing, including locations at 171 W. 230th St. in the Bronx, 550 Gateway Dr. in Brooklyn, 950 Old Country Rd. in Garden City, Long Island, and 300 Route 18 in East Brunswick, New Jersey.
Also expected to close are a southern New Jersey store at 2139 Route 38 in Cherry Hill, and an upstate store at 1 Carousel Center in Syracuse.
Sports Authority stores will remain open and run on normal schedules during the Chapter 11 process. The company's website will continue to function, and the chain plans to honor warranties on items purchased at its stores or online, CBS Denver reported.
"We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry," chief executive officer Michael Foss said in a written statement. The executive said that it needs fewer stores as consumers are increasingly shifting to online shopping.
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 Co. 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 Inc., 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 liquidity 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.
Customers are told that the changes will not affect them, and gift card balances, exchange/return policies, warranties, and Sports Authority credit cards will remain the same.
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