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 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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Tags: Bankruptcy, Retail
This is too bad – they were nice stores, with a lot of good inventory.
I understand why they are having trouble, despite the recent boom in gun sales: I think they expanded too quickly, and I also think they didn’t promote the new stores very well. The firearm sales staff was not particularly impressive, at least the few I spoke with.
To top it all off, I think they did actually have some supply-chain issues during the time they were trying to work out their sale to the Canadian cooperative, crippling their ability to capitalize on the recent surge in demand for ammo, guns, and reloading supplies.
It is far too bad that the financial state of this country has crippled such a wonderful chain of stores such as Sportsmans Warehouse. The store in my community (Wenatchee, Wa.) is a superbly managed store and the hunting/gun department has the most professional and well informed staff that I have ever encountered and all store employees are exceedingly polite. The display of guns and ammo far exceed all other stores combined, in my community. I am confident that the upper management of Sportmans Warehouse will re-organize and pull through the present recession and again become the successful chain that my towns store presently is.