If you’ve been tuning in to WearTesters.com recently you’ve seen the reports of Sports Authority missing key debt payments. Then, they underwent layoffs. Now, it looks like the company is preparing for bankruptcy filing.
According to a Bloomberg report, Sports Authority is in talks with lenders to reorganize in Chapter 11 bankruptcy proceedings as it faces a debt payment in 10 days. Sources said the potential restructuring would entail the closing of as many as 200 of its more than 450 stores in reorganization.
TPG Capital Management LP, one of the lenders that reportedly provided SA with $70 million of a $95 million asset-backed loan late last year to help secure its credit during the holiday shopping season. The Bloomberg report states that Sports Authority is negotiating with creditors as time runs out on the $20 million interest payment it missed last month on its $343 million of subordinated debt. The company has been in talks with bondholders about accepting a loss in exchange for other securities in order to forgo bankruptcy filings.
Sports Authority, which is has at least $643 million in debt, according to Bloomberg, was bought by private equity firm Leonard Green & Partners LP for $1.3 billion in 2006.
To check out the Bloomberg report, click here.
Wow. Another company destroyed by a hedge fund.
more like “Another company destroyed by Online sellers”
Is there any word on Dick’s (projected) growth?
I know one SA in the Bay Area was virtually replaced by a newly-constructed Dick’s within a block’s distance. Seems like they’re more able to source higher end stuff, and pro athlete marketing. Then again, I don’t remember how SA was in terms of merchandise as a kid. Just served as my general go-to for when I first joined sports teams in elementary school, and didn’t give too much mind to what level of gear I had.