Modell’s Sporting Goods Is Bankrupt
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After a long-fought battle, Modell’s Sporting Goods filed today for Chapter 11 protection in the U.S. bankruptcy court in New Jersey, citing a challenging retail environment, Reuters reports.
The family-owned sporting goods chain had tried a number of tactics in recent months to stave off bankruptcy, including negotiations with landlords, which yielded some concessions and saved several of its stores that were previously on the chopping block.
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“We will do whatever it takes to save these stores and protect the communities that we have served and loved for generations,” CEO Mitchell Modell said in a Fox Business interview last month. “This is not a business, and these are more than associates.”
Amid the company’s struggles, Modell’s chief had considered selling a minority stake to save the family business on top of loaning it $6.7 million last year, and the company recently sold its warehouse in the Bronx to raise more money to keep it afloat.
Ahead of this week’s filing, the 130-year-old chain had managed to rescue seven of the 24 stores it slated for closure. The retailer had reportedly hired financial advisers following a disappointing performance over the critical holiday shopping season. Modell’s chief told the WSJ in February that the company 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.
Modell’s is among a growing list of sporting goods purveyors that have felt the pressures of an evolving retail environment in recent years. 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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