The effects of Sports Authority’s decision to sell some or all of its assets, instead of pursuing bankruptcy reorganization, are unclear for for the chain’s nearly 500 stores.
The sporting goods chain with 10 stores in the Sacramento area filed for Chapter 11 bankruptcy in March, announcing plans to close 140 of its 463 stores and to reorganize its remaining business after reaching agreement with its creditors.
However, lawyers for the struggling, Colorado-based chain notified the federal bankruptcy court in Delaware last week that a reorganization plan had failed to get approval from creditors and lenders.
That prompted the decision to pursue the selling of assets, which some retail analysts quickly interpreted as the first move by Sports Authority to close all of its stores.
The retailer called initial speculation that all stores will be closing premature.
A statement circulated to media on Monday said Sports Authority is “pursuing a sale of some or all of the business” and that there is interest from some potential buyers.
Sports Authority has 10 stores in the extended Sacramento region – two in Sacramento and individual stores in Citrus Heights, Folsom, Elk Grove, Roseville, Stockton, Modesto, Fairfield and Vacaville.
Sports Authority, which had nearly 15,000 part- and full-time employees at the time of its bankruptcy filing in March, reportedly is saddled with more than $1 billion in debt.
It has struggled in the highly competitive sporting goods sector, and analysts have pointed to Sports Authority’s large number of brick-and-mortar stores amid the increasing popularity of online shopping for sports equipment.
In 2006, Sports Authority agreed to be purchased in a leveraged buyout led by the Los Angeles-based private equity investment firm Leonard Green & Partners. That transaction was valued at $1.4 billion.