Another sneaker specialty store is down for the count.
In court documents obtained by the Washington Business Journals, the company listed between $500,000 and $1 million in assets and less than $2,566,050 in liabilities. Among its liabilities is $1.8 million owed to Nike, a nearly $300,000 claim by Adidas and more than $192,500 to New Balance.
Sports Zone Elite has been on a downward spiral since the 2008 recession. When it fell behind on a $4 million bank note in 2010, the company borrowed $1.8 million from one of its principals, Business Journals reported. The loan is still unpaid.
Sports Zone Elite also fell behind on payments to Nike. The retailer issued a promissory note for $3.7 million to Nike in February 2017 and began making $330,000 monthly payments to Nike per month. The company’s filing states those payments “depleted cash on hand” and led the company to close 18 stores in September.
Business Journals reported Nike filed a notice with the Virginia State Corporation Commission that it holds an interest in some of Sports Zone’s assets via the promissory note. The move could give Nike priority over other creditors in a bankruptcy proceeding.
Sports Zone Elite caps off a year of numerous footwear retail bankruptcies. Last month Shiekh Shoes filed for bankruptcy protection after it failed to find new funding, and Iconic Boston-based retailer The Tannery filed for Chapter 7 bankruptcy in July.
Meanwhile, Payless Shoe Source, which went bankrupt in March, has emerged from bankruptcy with a plan to re-establish itself with a greater e-commerce presence.