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Modell’s Sporting Goods prepares to file for bankruptcy
The century-old retailer has 140 leases on East Coast
Modell’s Sporting Goods appears poised to become the latest major retailer to file for bankruptcy.
The 130-year-old athletic gear company has stopped looking for an investor to help it renegotiate its leases and is no longer seeking better terms from its vendors, according to the New York Post.
CEO Mitch Modell had written to 19 building and mall owners and asked them to “dig deeper” by lowering or deferring rents to help Modell’s stave off bankruptcy. Many landlords want instead to take their spaces back and look for new tenants.
The company is now hoping that the Denver-based sportswear retailer JackRabbit will buy it out of Chapter 11, the Post reported, citing an unnamed source. JackRabbit purchased Olympia sports last year.
Modell’s has 140 leases in nine states on the East Coast.
JPMorgan Chase and Wells Fargo are Modell’s biggest lenders with roughly $50 million in outstanding debt. They will likely provide possession financing for the debtor.
Although Modell’s has recently shrunk, Mitch Modell had been willing to use his own money to help the business, loaning it $6.7 million last year.
“We have been totally transparent that if we get 90-percent support collectively from our vendors and landlords that we would have a successful path moving forward,” he told the Post.
Last May, the company said it was planning to try out small concept stores across New York, in line with a trend in retailers to reduce their real estate costs amid weakening sales. [NYP] — Eddie Small