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EAST BRUNSWICK, NJ–At one time Sports Authority was the world’s largest sporting goods retailer.
However, it filed for Chapter 11 bankruptcy on March 3 amid sky high debt and a myriad of other problems.
There are 21 Sports Authority locations in the Garden State, and the list of those closing has grown.
Five Garden State stores are among the list of 140 locations nationwide set to be closed in the coming months: East Brunswick (Route 18), Piscataway (Centennial Ave.), Manalapan (Route 9), Wayne (Willowbrook Mall), and Cherry Hill (Route 38).
The retailer has hired liquidators to conduct store closing sales immediately.
The company's bankruptcy petition make it the first major retailer to officially file for bankruptcy protection this year. Court documents indicate liabilities of nearly $10 billion and assets of about $1 billion.
The exact number of underperforming stores SA will shutter is still open to change.
By not updating its 456 stores across the country or giving customers a highly experiential in-store visit while shopping, the company lost sales to competitors such as Dick’s Sporting Goods which executed more effectively, given the difficult retail environment.
Dick's Sporting Goods is reportedly interested in acquiring some of the closing Sports Authority stores to add to its 600+ nationwide lcoations.
“[Sports Authority] let big sporting goods take over their business. They were the king of the hill just like A&P was the king of the hill, just like Sears was king of the hill,” said Howard Davidowitz, Davidowitz and Associates, Retail Consultancy.
Davidowitz said SA never took care of their debt, expanded “like crazy and ended up in the tank where they belong.”
CEO of Sports Authority, Michel E. Foss, in a public letter to customers, touched on the pressures of today’s changing retail climate, where online and mobile shopping is on the rise. He also said SA would upgrade its in-store experience and enhance its website.
“This was a tough decision to make, but we believe it was a necessary step in our plan to make Sports Authority and even better partner for our customers. The store closings will occur over the next three months.” Foss wrote.
The company did $3.5 billion in sales last year, and employed 16,000 people.
SA is based in Colorado, where it purchased the naming rights to the Denver Broncos’ stadium through 2035, for $6 million a year, in 2011.
It is reportedly unclear if Sports Authority Field at Mile High will change its name as the bankruptcy unfolds.
“They’ve done a crummy job as retailer, they did a bad job managing inventory, they’ve done a bad job managing customer service,” said Cory Johnson, a Bloomberg Radio & TV Anchor.
“They have less flexibility because of [their] debt. You just don’t have the nimbleness that you have when you are unlevered, said Lawrence Perkins, CEO of sierra constellation partners, via a Reuters Video.
“It is just really hard to execute when you have that albatross around your neck.”
Like the iconic Radio Shack, which filed for bankruptcy just over a year ago, SA joins the ranks of bankruptcies among major retailers who are up against changing consumer behavior and a trend toward online and mobile shopping.
“We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry,” said Foss."
“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.”
SA's customer loyalty program will continue without any changes, and the company said it intends to honor warranties on goods purchased at one of its stores or e-commerce sites.
Customers should be able to use any Sports Authority gift card with an available balance to purchase merchandise in stores or online.