Most or all of the products presented here come from our partners who pay us. This can influence which products we write about and where and how the product appears on a page. However, this does not influence our ratings. Our opinions are ours.
Sports authority, the big-box clothing and sports equipment retailer, filed for Chapter 11 bankruptcy on Wednesday. The company announced the closure of 140 stores, or about a third of its stores nationwide.
Documents filed with the U.S. bankruptcy court show the company’s debts could reach $ 1.1 billion.
Sports Authority has secured access to a maximum of $ 595 million which will keep the rest of its locations open for now. But if the company can’t find a buyer by April, it will close its remaining stores.
The company plans to merge
Filing for bankruptcy can allow companies to restructure their debt or sell part of their assets in order to regain profitability – and stay open. This seems to be the motivation for Sports Authority.
“We are taking this step so that we can continue to adapt our business to meet the changing dynamics of the retail industry,” CEO Michael E. Foss said in A declaration posted on the company’s website. “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 necessary to continue to make the necessary investments in our operations. “
Consumers Should Solve Unfinished Business
Chapter 11 bankrupt businesses can continue to operate. However, if Sports Authority can’t find a buyer and is forced into Chapter 7 bankruptcy, it will have to shut down all of its stores and liquidate its assets – which could leave customers in dire straits.
The company expects its customer loyalty program to continue without any changes at this time and will honor warranties on items purchased in its stores or online, Foss said in the statement. Customers can always do Return or redeem and use Sports Authority gift cards.
But if you have a gift card, it is better to use it as soon as possible, according to the advice of the Better Business Bureau provides customers with Chapter 11 stores. The cards could be worthless if the business ceases to operate. The same advice applies if you want to return or exchange an item: take care of it now, or you could end up with unwanted goods.
Courtney Jespersen is a writer at NerdWallet, a personal finance website. E-mail: [email protected]. Twitter: @CourtneyNerd.
Image via iStock.