Outdoor goods company Gander Mountain is the latest retailer to falter under competition from online sellers, announcing that it has filed for bankruptcy protection and will close dozens of stores.
The St. Paul, Minn-based chain says that it will begin shuttering 32 stores in 11 states over the next several weeks, potentially impacting at least 1,280 full time and part-time workers. It filed for Chapter 11 bankruptcy protection on Friday in the face of dwindling store traffic and shelves stocked with more goods than it was able to sell.
“Despite aggressive actions to improve the efficiency of the company's retail operations,’ Gander Mountain said in a statement, “the underlying financial impact from under performing stores and unproductive, excess inventory hampered efforts to create a sustainable path forward.’’
Throughout the retail sector, traditional stores, from big box chains to specialty shops, have struggled to entice shoppers through their doors as consumers increasingly do their buying online. Last month, roughly 14% of retailers monitored by Moody’s Investors Service could be deemed “distressed.’’ And several chains have sought bankruptcy protection, including American Apparel, Wet Seal, and The Limited.
But the sporting goods sector appears to be in particular peril, with e-commerce competitors often offering consumers more options for lower prices. There have been at least ten other bankruptcies among sports chains with over $10 million in liabilities in the last year and a half, according to bankruptcy research source Reorg First Day.
Prior to Gander’s announcement, MC Sports was the most recent sports retailer to seek bankruptcy protection, saying last month that it would close 68 locations. That move will wipe out 1,300 jobs throughout the Midwest.
Others shutting their doors include Sports Authority, once the second biggest sports retail company in the U.S., which shuttered more than 400 locations when it liquidated last year. Golf equipment giant Golfsmith filed for bankruptcy protection in September, and Sport Chalet, a southern California-based chain closed in 2016 after being in business for 57 years.
"Absolutely everything is up for grabs in terms of potential bankruptcies and otherwise failed companies,’’ says Larry Perkins, CEO of interim management firm SierraConstellation Partners, whose clients include struggling retailers.
Besides competition from online giants Amazon and Zappos, Gander and other chains are being pressured by high-end retailers like Cabela and Bass Pro, which are currently attempting a merger.
Those more specialized chains "have a level of expertise in stores that enhances the retail experience, so they're able to command a premium,'' Perkins says. And then there are the big box retailers, Walmart and Target where "you can get most of the stuff they have at Gander Mountain . . . .I don't know where the Gander Mountains of the world fit in that picture.''
Gander Mountain, which currently has 162 stores in 27 states, is shutting locations from Alabama to Wisconsin. A typical store has 20 to 30 full-time employees, according to the company, and another 20 to 30 staffers working on a part-time or seasonal basis. Workers displaced by the store closures may be considered for jobs at other locations, the company says.
“The decision to close these stores was not an easy one, and was made only after an extensive strategic review of our options,'' Gander Mountain said in a statement.
The company says that it “is in active discussions’’ with several potential buyers, and anticipates having bids before an auction scheduled for some time in late April. The retailer plans to present the winning offer to the bankruptcy court at the start of the following month and is aiming for a deal to be finalized by May 15.
Gander Mountain will remain open in Grand Chute while its parent company searches for a buyer.
The stores in Georgia slated to close are:
* McDonough, Ga., located on 1970 Jonesboro Road
* Lawrenceville, Ga. located at 1200 Scenic Hwy, Ste. G.
* Augusta, Ga. located at 145 Mason McKnight Jr. Pkwy.
Contributing: Nathan Bomey