March 24th, 2009

Sportsman's Warehouse Files for Chapter 11 Bankruptcy

The Sportsman’s Warehouse chain of outdoor stores filed for Chapter 11 bankruptcy this past weekend. In papers filed with the U.S. Bankruptcy Court in Wilmington, Delaware, Sportman’s Warehouse declared assets of $436.3 million versus outstanding debt of $452.3 million. Under Chapter 11, a company is protected from creditor lawsuits while it works out a plan to repay its debts during reorganization.

Sportsman's Warehouse

Sportsman’s Warehouse currently operates 29 stores, including four stores in its home state of Utah. “Sportsman’s Warehouse is another retailer victim of the worldwide global recession,” Rourk Kemp, the company’s chief financial officer (CFO), stated in Bankruptcy Court papers. Last year, Sportsman’s Warehouse announced a deal to sell 80% of its operations to a Canadian agricultural cooperative. However, that deal basically fell through, precipitating this Chapter 11 filing.

Stores to Remain Open During Reorganization
Sportsman’s Warehouse does not plan to liquidate or go out of business entirely. According to CFO Kemp, Sportsman’s Warehouse intends to continue its normal business. It will keep its remaining 29 stores open, having already closed 23 stores and sold 15 others. It will also continue to pay employees’ wages and benefits and honor customer service policies, such as returns, exchanges, credits and gift-cards.

New Financing Source
To help pay the bills during reorganization, Sportsmans’ Warehouse announced it has secured, from G.E. Capital Corp., $85 million in financing. These funds will be available to the company while it is under the Chapter 11 protection.

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