Sports Authority recently announced that it was planning to sell 140 of its stores across the country, including some in Ohio. This will serve as part of the company's reorganization plan under Chapter 11 bankruptcy. The company reported that it was left with no other option than to give up the leases and close or sell one-third of its stores.
According to reports, the company's failure to follow consumer trends, such as the significant swing toward online retailers, had resulted in a loss of market share. Furthermore, the decline in golf's popularity is also considered as a contributing factor to the company's accumulation of debts of $1.1 billion. A spokesperson for Sports Authority said the protection of Chapter 11 bankruptcy offers the company the opportunity to streamline operations and re-establish both operational and financial business strength.
Although the protection of bankruptcy offers a company another chance at success, survival is not guaranteed, and professional legal guidance may be required every step of the way. Important choices have to be made, such as reorganizing to try and keep the business afloat or liquidating assets to pay creditors. Sports Authority reported that several parties had expressed interest in buying some or all of the company's assets.
Ohio business owners who are suffering the consequences of the changing market trends may want to consider the protection offered by the various options under the U.S. Bankruptcy Code. An experienced bankruptcy attorney can explain the pros and cons of bankruptcy filings, along with the requirements for each option. This would allow a client to make informed decisions about the future of his or her business.
Source: USA Today, "Sports Authority files for bankruptcy protection", Nathan Bomey, March 2, 2016