Eastern Outfitters files for Chapter 11 bankruptcy
Eastern Outfitters LLC, which includes discount retailer Bob's Stores and outdoor retailer Eastern Mountain Sports, filed for Chatper 11 bankruptcy protection on Sunday, Reuters reports. The retail company is owned by private equity firm Versa Capital Management.
British sportswear retailer Sports Direct International Plc is in talks with the sports and outdoor retailer to become a stalking-horse bidder, according to that report.
A request for comment from Retail Dive to Eastern Mountain Sports was not immediately returned. Versa Capital Management and Sports Direct each declined to comment.
In April 2016, the brand's previous owner, Vestis Retail Group, shuttered regional sports retailer Sport Chalet in order to focus on its Bob’s and Eastern Mountain Sports operations, and it ultimately sold those retailers to Versa. At the time, Eastern Outfitters had more than $400 million in annual revenue, according to Reuters, Now Versa, which most recently closed all remaining Wet Seal stores this month amid that chain's second bankruptcy in about two years, has apparently run out of patience for Eastern Mountain Sports' prospects.
The fierce competition in the sporting goods space also felled Sports Authority, which filed for bankruptcy and liquidated last year. Sports Authority was once the largest sporting goods chain in the U.S., but it was hobbled by mounting debt, weak e-commerce returns and failures to meet increasing challenges in the space. Dick’s Sporting Goods acquired its intellectual property and many of its stores.
Eastern Mountain Sports is just the latest retailer own by a private equity group to run into trouble. The Limited, owned by Sun Capital, recently shut down, while J. Crew, owned by TPG Capital LP and Leonard Green & Partners L.P., last week sued its lenders, alleging they're interfering with its restructuring plans.
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