Sports Authority, facing a $20 million interest payment in 10 days that it has failed to pay, is preparing a bankruptcy filing, sources have told Bloomberg.
Sports Authority will likely close 200 of its 450 stores under the restructuring plan, according to Bloomberg’s report. The retailer is in talks now with bondholders, which could allow it to avoid bankruptcy.
The retailer, according to Bloomberg, is at least $643 million in debt.
Sports Authority was once the dominant national sporting goods retailer in the U.S. but is now being overshadowed by Dick’s Sporting Goods and challenged by more specialized retailers like Lululemon Athletica and even Amazon, which has boosted its apparel sales in recent months.
This fierce competition has already felled smaller chains in the space, including Boston-based City Sports, which filed for bankruptcy protection in October last year.
With athleisure apparel such a big draw, almost anyone selling apparel is offering it, from Gap to Victoria's Secret. Meanwhile, more traditional sales outlets for sporting goods retailers, like golf gear, have fallen off, meaning that Sports Authority is facing competition from new factions.
Now Sports Authority appears to be buckling under the pressure.