Modell’s to Close 24 Stores in Hopes of Saving the Business
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Modell’s Sporting Goods is set to close two dozen stores in a bid to preserve its 130-year-old business.
In an interview on Friday with Fox Business, CEO Mitchell Modell said that the New York-based chain would shutter 24 locations across the country and was considering offering a minority stake in the firm in hopes of keeping the firm afloat.
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“We’re doing it for the whole [company] so we can save 4,300 families’ jobs,” Modell said.
The interview comes a week after a WSJ report indicated the retailer had hired financial advisers following a disappointing performance over the critical holiday shopping season. Modell’s chief told the publication that the company had stopped paying an unspecified number of landlords and some of its vendors as well as began discussions with suppliers in an effort to prevent bleeding out cash.
Modell’s is among the growing list of retailers that have felt the pressures of a changing retail landscape in recent years. In January, the firm made the decision to shutter nine of its 150 stores.
It’s also not the first time Modell’s has faced the possibility of going bankrupt: Just over a year ago, in March, the firm hired a restructuring adviser with the intention of fixing the company, which had suffered from soft sales and continued to lose business to big-box and online stores. (It faces heavy competition from rival sporting goods retailers like Dick’s Sporting Goods and major national chains such as Walmart, among others.) Modell’s, however, narrowly dodged a bankruptcy filing when its CEO pumped $6.7 million of fresh capital into the company.
In the past five years, several big names in the sporting goods sector have also fallen: Grand Rapids, Mich.-based MC Sports filed for Chapter 11 protection in 2017; Sports Chalet announced it would close its doors in April 2016; Sports Authority declared bankruptcy in March 2016; and City Sports went out of business in late 2015.
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