The sporting goods sector can’t seem to catch a break in this changing retail environment.
In a statement this week Michigan-based MC Sports, which sells sports apparel and footwear throughout the Midwest, said it has initiated Chapter 11 bankruptcy proceedings.
“After a valiant and concerted effort by MC Sports’ associates, vendors, landlords, and outside professionals to restructure the company’s balance sheet and operating performance, the company was unable to reach an agreement on a viable out of court proposal,” the company’s president and CEO Bruce Ullery said. “The only alternative to address our immediate liquidity issues is to commence liquidation sales at all stores, while concurrently expediting our pursuit of alternative financing and going-concern sale options under the protections of Chapter 11.”
The company, which has been in business since 1946, cited increased competition, the “blurring” of distribution channels by key athletic brands, increasing direct to consumer sales by key vendors and the growth and disruption of e-commerce as the causes that led to its demise.
MC Sports tried moving to larger format stores and cutting back on poor performing locations, but to no avail.
Now liquidation sales are expected to commence at the company’s 68 stores, and the funds from those sales will go toward paying off legacy costs, including trade debt and long-term leases it says aren’t in line with current market conditions. The company has retained Stout Risius Ross Advisors to facilitate the proceedings.
Earlier this month, Eastern Outfitters, parent company of Bob’s Stores and Eastern Mountain Sports filed for bankruptcy. That bankruptcy followed the bankruptcy filing last year by Vestis Retail—operator of Eastern Mountain Sports, Bob’s Stores and now out of business Sports Chalet. Sports Authority’s bankruptcy filing came a month before Vestis Retail.