New York City — Modell’s Sporting Goods has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of New Jersey. The fourth-generation, family-owned retailer will close all of its 153 stores throughout New York, New Jersey, Pennsylvania, Connecticut, Rhode Island, Massachusetts, New Hampshire, Delaware, Maryland, Virginia and Washington, D.C.
The New York City-based sporting goods, athletic footwear, active apparel and fan gear retailer was founded in 1889. The company will begin liquidation sales Friday, March 13 and plans to continue operating its online platform.
Modell’s lenders, which include Wells Fargo and JP Morgan Chase, will provide the company with the financial flexibility to operate the business in the near term, including paying employee wages and benefits. According to the New York Post, Modell’s employs 3,623 workers.
With the rising competition and plethora of online options to shop for athletic gear, CEO Mitchell Modell cites an “extremely challenging environment for retailers” as a reason for the bankruptcy.
“Over the past year, we evaluated several options to restructure our business to allow us to maintain our current operations,” says Modell. “While we achieved some success, in partnership with our landlords and vendors, it was not enough to avoid a bankruptcy filing amid an extremely challenging environment for retailers.”
Modell has partnered with Tiger Capital to liquidate the stores. Modell’s has been engaged in discussions with its financial creditors and has been exploring a recapitalization of the business through a potential sale of some or all of its assets or an equity investment. Modell’s will continue to pursue these discussions.
Robert Duffy of Berkeley Research Group (BRG) has been named chief restructuring officer of Modell’s. BRG is also acting as Modell’s restructuring adviser. RBC Capital Markets is acting as investment banker for Modell’s. Cole Schotz is the company’s legal counsel and A&G Realty Partners is marketing the store leases.
— Alex Tostado