If you or your kids participate in any sports or outdoor activities you know that all the gear that is required does not come cheap. You might think this means that the sporting goods retailers in your area are doing pretty well, but in just this past month, two well-known sporting and outdoor goods retailers have filed for bankruptcy.
MC Sports has seven stores in Wisconsin and all of them are closing. CEO Bruce Uller said in a court filing that “the rapid migration of sales from traditional brick-and-mortar retailers to online resellers,” competing distributors, specialty retailers and “changing consumer preferences” contributed to the company’s demise.
Gander Mountain has also filed for bankruptcy, although its filing was less of a surprise. Rumors had been circulating for about a month that it was planning on filing. It announced it is closing its stores in Eau Claire and Germantown, but plans to keep its other Wisconsin locations open while it seeks a buyer. It too cited the challenges of competing with online retailers in its filing.
Both companies filed for Chapter 11 bankruptcy, which allows filers to keep operating while they reorganize or find a buyer. However, Gander Mountain is the only one talking about doing so. MC Sports is liquidating their inventory and closing all of their stores.
These two are just the latest sporting goods chains with a presence in the Milwaukee area to declare bankruptcy or go out of business. Sports Authority, Golfsmith, Eastern Outfitters, and Sport Chalet have all previously closed some or all of their stores.
It will be interesting to see if Gander Mountain during its Chapter 11 process, and what happens to other retailers in this sector over the coming years. The two biggest players in the arena, Bass Pro and Cabela’s, are working on a $5 billion merger, which suggests there is still plenty of money to be made, but that efficiencies of scale are critical.
Online shopping is only becoming more popular, as all brick and mortar owners know, making it a threat to all sorts of retailers. The smart business owners out there are looking at their options, and for many, a reorganization bankruptcy is a good one.