Camping World Holdings, Inc., an Illinois-based network of RV-centric retail locations and a provider of a portfolio of services, protection plans, products and resources for outdoor enthusiast, won the bankruptcy auction of Gander Mountain Company and Overton’s, Inc., according to a Camping World press release.
The deal includes an amount equal to cost, which as of the date of the auction was approximately $15.6 million, plus $22.2 million for certain other assets, including real estate leases, intellectual property rights, operating systems and platforms, certain distribution center equipment, the Gander Mountain and Overton’s e-commerce business, and fixtures and equipment for the Overton’s retail and corporate operations.
Rival outdoor gear retailer Sportsman’s Warehouse last week was said to have plans to bid on 80% of Gander’s locations. Investment firm Gordon Brothers and holding company Hilco Merchant Resources in March submitted a joint stalking horse bid to buy all of Gander Mountain’s assets, which Camping World had to top.
Under this deal, more Gander Mountain stores may yet close, depending on Camping World’s evaluation of stores’ performance, Camping World CEO Marcus Lemonis said in a press release Monday. The agreement obligates Camping World to assume a minimum of 17 leases, and Lemonis told The Wall Street Journal it's likely at least half of Gander's 160 stores won't survive.
Financial services and liquidation firms Tiger Capital Group and Great American Group have already been working to liquidate 32 under-performing Gander Mountain stores nationwide during the bankruptcy process.
“The Gander Mountain and Overton customer and their affinity to the outdoor lifestyle are the perfect complement to our Camping World business,” Lemonis said. “The structure of our deal provides much flexibility and will not only allow us to refine the inventory selection and select only those stores which are profitable or we believe have a clear path to profitability, but will also allow us to immediately offer our comprehensive portfolio of services, protection plans, products and resources to the existing Gander Mountain and Overton customer base and in stores in which we elect to operate.”
Fierce competition in sporting goods retail and debt loads are catching up to retailers like Gander Mountain that overextended themselves and failed to keep up with evolving trends and changing customer demands. Gander, however, is hardly the only one in the space experiencing trouble. Eastern Outfitters, which includes discount retailer Bob's Stores and outdoor retailer Eastern Mountain Sports, filed for bankrupty protection in February and was recently bought by U.K. sports retailer Sports Direct.
Meanwhile, Cabela’s, which like Gander is a major gun and ammunition seller, continues to struggle as it awaits the final word from the Federal Trade Commission regarding its proposed acquisition by privately held rival Bass Pro Shops.
Many of these retailers are offering the same brands and merchandise mix as each other, forcing them to compete on price. And gun sales in particular, which have mostly fallen in recent years, have been a drag on retailers, like Gander and Cabela’s. "Gander Mountain is well-known for carrying today's most sought-after brands," Scott Carpenter, president of its retail solutions division, said in a press release emailed to Retail Dive. "Many of these brands are rarely, if ever, discounted, so shoppers will want to come in early to take advantage of these sales while selection lasts."