Outdoor and sporting goods retail chain Gander Mountain says it plans to shut down 32 stores as part of a Chapter 11 bankruptcy filing.
Gander Mountain announced on Friday that it plans to remain open, but is putting the business up for sale.
Thirty-two under performing retail locations will begin a shutdown process in the next several weeks, according to the company.
The list of stores slated for closing does not include the recently remodeled Gander Mountain at the Eastwood Mall Complex in Niles.
A company spokesperson has provided a list of the stores that will be shut down:
- Alabama (4) – Gadsden, Mobile, Montgomery, Tuscaloosa
- Georgia (3) – Augusta, McDonough, Snellville
- Illinois (3) – Champaign, Algonquin, Springfield
- Indiana (2) – Merrillville, Greenfield
- Minnesota (3) – Rogers, Mankato, Woodbury
- New York (1) – New Hartford
- North Carolina (2) – Raleigh, South Charlotte
- Tennessee (1) – Chattanooga
- Texas (10) – Houston, Killeen, Laredo, Lubbock, Round Rock, San Antonio, Sugar Land, Texarkana, Waco, West Houston
- West Virginia (1) – Charleston
- Wisconsin (2) – Eau Claire, Germantown
The company says the decision is based on an in-depth review of the its strategic options to preserve the value of the company and “position it for long-term success”.
Gander Mountain officials says they have experienced what they describe as challenging traffic patterns and shifts in consumer demand resulting from increased direct-to-customer sales by key vendors and accelerated growth of e-commerce.
In spite of actions to improve the efficiency of Gander Mountain's retail operations and support functions, the company says underlying financial impact from under performing stores and unproductive, excess inventory hampered efforts to create a sustainable path.
The company's strategic review yielded the following conclusions:
A narrowly focused and lower cost operating model is necessary to position the company for profitable growth;
The company does not have the financial capacity or time to reset its operations to fully implement the new model and, as a result;
The best available path forward is to sell the company on a going-concern basis.
The company says that bankruptcy protection will enable them to manage the sale process on an expedited basis while protecting the interests of customers, employees and others.
Gander Mountain says it is in active discussions with a number of parties interested in a going-concern sale and expects to solicit bids prior to an auction to be held in late April 2017.
The company expects to submit the winning bid to the Court for approval in early May and anticipates a closing of the sale by May 15.
The company says it generally expects to conduct normal business operations during restructuring.
According to the news release, employee pay will continue to arrive on time and in full, employee benefits will remain in place, retirement accounts are intact and protected.
The company has obtained a committed debtor-in-possession ("DIP") financing facility underwritten by Wells Fargo.
Subject to court approval, this DIP financing, combined with cash from operations, is expected to provide sufficient liquidity to support the company's continuing business operations and to minimize any disruption during the reorganization process.