Sports Authority files for bankruptcy, closing 140 stores
NEW YORK - Sports Authority said it is filing for Chapter 11 bankruptcy protection.
The retailer said Wednesday that it plans to close or sell about 140 stores and two distribution centers, in Denver and Chicago. The Englewood, Colorado, company has 463 stores in 41 states and Puerto Rico. The store closings are expected to take up to three months.
The company has not announced which stores will close, said spokesman Steven Goldberg.
"The actual stores that will be closed will be determined as part of the Chapter 11 process," he said.
Local stores operate in Aurora, Bolingbrook, Crystal Lake, Deerfield, Geneva, Gurnee, Hoffman Estates, Lake Zurich, Lombard, Mount Prospect, Niles, Northbrook, Schaumburg, Vernon Hills, Wheaton, Willowbrook, Wilmette, among others.
Sports Authority stores will remain open and run on normal schedules during the Chapter 11 process. The retailer's website will continue to function, and the chain plans to honor warranties on items purchased at its stores or online.
"We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry," CEO Michael Foss said in a statement. Foss said that it needs fewer stores as consumers are increasingly shifting to online shopping.
The retail industry as a whole has struggled with the consumer move to online shopping, trying to find ways to lure customers to brick-and-mortar stores instead. Macy's Inc. has opened Macy's Backstage, in order to go head to head with discount retailer T.J. Maxx.
And J.C. Penney Co. is using store-label offerings to fight against pricing pressures from online rivals and recently launched a new campaign called "Get Your Penney's Worth," which offers certain store-label items for pennies.
In a letter to customers posted on the company's website, Foss said that Sports Authority's long-term plan includes upgrading stores and improving its website.
Foss said that The Sports Authority Inc., which is privately-held, has received interest from third parties that may want to invest in or buy some or all of the business. The company plans to continue evaluating all of its options, he added.
Sports Authority said that it expects to have sufficient liquidity during the Chapter 11 process when factoring in cash from operations and anticipated access to up to $595 million in debtor-in-possession financing.
• Daily Herald Business Writer Anna Marie Kukec contributed to this report.