Gander Mountain, a popular retail chain selling outdoor and sports products in the United States has filed for bankruptcy under Chapter 11 to seek protection against creditors. As a first step, the company will pull the shutters of 32 stores within the next two to three months. With 162 stores across the US, the Minnesota-headquartered company was under trouble since January 2017 with vendors not being paid properly.
Owned by David Pratt and the Erickson (Holiday Station) family since 2008, the company will close stores located in Alabama, Georgia, Illinois, Indiana, Minnesota, New York, North Carolina, Tennessee, Texas, West Virginia and Wisconsin.
Among all the locations, the group will shut ten stores in Texas, which is the largest in the whole restructuring process. The management added that selling the company in a phased manner would provide rich dividends in the long run.
Sale auction expected by April end
With adequate protection from the court, the company will be able to properly manage the process involved with the sale on a fast-track mode by protecting the interests of customers, employees, and vendors. The company has already started to talk with several buyers who have a high potential to buy the outlets. The team is planning to conduct an auction by the end of April with May 15 as the cut-off date.
Total sales crossed $1 billion, says estimates
According to the information provided with the Chapter 11 Bankruptcy filing, Pratt owns 44.6 percent stocks under Gratco LLC, and the Erickson group owns 44.8 percent of majority shares. Based on the estimates released by a leading analyst firm, the annual sale of the company is pegged at $1 billion with a total number of 5000+ employees across the United States.
Over the last few months, Gander has been selling products at a discount of up to 25 percent within minimum being 15 percent.
Terming Gander Mountain as a great company with an excellent legacy, Jens Welin of Chicago-based Starcom said that the market is facing turbulence due to the effect of consolidation. However, they are confident that the company will be able to survive by posting good earnings within the next eight to ten months.
In the US, the retail stores involved in selling outdoor and sports related products are facing a slump in the sales. While Cabela has been taken over by Bass Pro Shops, Eastern Outfitters also recently filed for Chapter 11 bankruptcy. In 2016, the Sports Authority closed down nearly 300 stores across the US, which resulted in mass layoffs. It remains to be seen as to whether Gander Mountain will perform any layoffs after selling the assets.
