Sports Authority Inc. filed for chapter 11 bankruptcy early Wednesday, according to reports. There was wide speculation Tuesday that the U.S. sporting goods retailer would do so amid mounting financial troubles.
The retailer has been in debt since a $1.3 billion buyout in 2006 that turned the company private. In a statement following the bankruptcy filing in the U.S. Bankruptcy Court for the District of Delaware, the company said it had access to almost $600 million in bankruptcy financing, Bloomberg reported.
As part of its restructuring process, Sports Authority will close or sell 30 percent of its 463 stores whose sales have been affected by the rise of online shopping, according to the Financial Times. The retailer said it had received “strong interest” from potential buyers for part or all of its assets, and it was also considering “comprehensive debt restructuring” with its creditors.
The Colorado company, whose name adorns the home stadium of Super Bowl 50 winner Denver Broncos, has at least $643 million in debt. It missed a Jan. 15 interest payment and also failed to pay it during the 30-day grace period that ended on Feb. 14, Bloomberg reported. The chapter 11 filing protects the company from its creditors while it undergoes restructuring.
Michael Foss, Sports Authority’s chief executive, said in the statement: “We intend to use the Chapter 11 process to streamline and strengthen our business both operationally and financially so that we have the financial flexibility to continue to make necessary investments in our operations.”