In light of “substantial interest” from several entities, sporting gear retailer Sports Authority has requested to delay its bankruptcy auction until May, according to Robert Klyman, one of the lawyers for the company, the Wall Street Journal reports.
Sports Authority anticipates a healthy bidding contest, Klyman told Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, DE, and she approved the delay.
Reuters reports that rivals Academy Sports + Outdoors, Dick’s Sporting Goods and Modell’s Sporting Goods have expressed interest in bidding on Sports Authority's assets.
Sports Authority filed for bankruptcy early last month. A statement from CEO Michael Foss said Sports Authority will close or sell around 140 stores and two distribution centers in the coming months as part of the process. Foss told the Denver Post that the company plans to let go around 3,400 of its 15,000 employees.
Despite the interest reported by Reuters, it remains unclear how many Sports Authority stores would remain open post-bankruptcy, if any, considering that bidders could be most interested in the company’s assets and inventory. No company expressed interested in acquiring Sports Authority before its March 2 Chapter 11 filing.
“We don’t know what these bids are going to provide,” Keith Martorana, another Sports Authority attorney, said, according to the Wall Street Journal. Indeed, Sports Authority could almost literally be on the chopping block, with various entities taking bits and pieces of its operations and assets, for that matter.
Sports Authority was once the largest sporting goods chain in the U.S., and in 2006, when the retailer was acquired by private equity firm Leonard Green & Partners for $1.3 billion, its future was bright. But Sports Authority has been hobbled by mounting debt, weak e-commerce returns and failures to meet increasing challenges in the space as general merchandise brands like Wal-Mart and Target and apparel retailers like Gap moved assertively into the sporting gear space.
Sports Authority is at least $643 million in debt, according to reports. Details of its struggles emerged earlier this year, when Bloomberg said that the retailer was in talks with bondholders. News of missing payments to suppliers and a failure to pay a $20 million interest payment soon followed, as well as store closings and employee layoffs.
Earlier this month, Sports Authority settled more than 160 lawsuits filed by its consignment suppliers. At issue was some $85 million worth of winter gear and other goods being sold at Sports Authority stores—items suppliers wanted returned because they feared not getting paid.