Modell’s Reportedly Exploring Options to Stave Off Bankruptcy
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Modell’s Sporting Goods is reportedly exploring options to stave off a potential bankruptcy.
The New York-based chain has hired financial advisers “in recent weeks” as it seeks to avoid going out of business following a disappointing performance over the critical holiday shopping season, according to a report published yesterday by The Wall Street Journal.
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The publication included comments from CEO Mitchell Modell, who reportedly said that the retailer had stopped paying an unspecified number of landlords and some of its vendors as well as began discussions with suppliers in an effort to prevent bleeding out cash.
“All options are on the table right now,” the executive chief was quoted telling WSJ. “The number one option is that we maintain the company.”
FN has reached out to Modell’s for confirmation and further comment.
Modell’s — which has been in business for 130 years and has more than 150 stores — is among the growing list of retailers that have felt the pressures of a changing retail landscape in recent years. In January, the firm made the decision to shutter nine of its 140 stores.
It’s also not the first time Modell’s has faced the possibility of going bankrupt: Just over a year ago, in March, the firm hired a restructuring adviser with the intention of fixing the company, which had suffered from soft sales and continued to lose business to big-box and online stores. (It faces heavy competition from rival sporting goods retailers like Dick’s Sporting Goods and major national chains such as Walmart, among others.) Modell’s, however, narrowly dodged a bankruptcy filing when its CEO pumped $6.7 million of fresh capital into the company.
In the past five years, several big names in the sporting goods sector have also fallen: Grand Rapids, Mich.-based MC Sports filed for Chapter 11 protection in 2017; Sports Chalet announced it would close its doors in April 2016; Sports Authority declared bankruptcy in March 2016; and City Sports went out of business in late 2015.
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