To recover following a lackluster display over the holidays, Modell’s Sporting Goods has brought on a series of advisers with the inclusion of a chief restructuring officer. The retail chain has encountered slumping sales and a competitive field from eCommerce, as well as big-box retailers, The Wall Street Journal reported.
The retailer recently spent millions on Yankees, Giants and Jets merchandise. That did not sell well as the Giants and Jets had a less-than-stellar season, while the Yankees did not make the World Series. Winter weather that was somewhat warm also hurt as demand for sweatshirts, as well as boots, was not as strong as forecast.
Chief Executive Mitchell Modell made it known that the firm stopped paying some vendors and landlords and has begun discussions with suppliers as it aims to stay clear of bankruptcy and preserve cash. “All options are on the table right now,” Modell said per the outlet. “The number one option is that we maintain the company.”
The company brought on Berkeley Research Group, RBC Capital Markets, and the Cole Schotz law firm. Bob Duffy of Berkeley Research Group is functioning as chief restructuring officer. And the retailer came to the decision in January to shutter nine of 140 locations.
The news comes as JCPenney, Macy’s, Express, Papyrus and Pier 1 Imports, along with other merchants, have reported 1,218 closings this year already. This will be the fourth consecutive year that retailers will shutter 100 million square feet of space, which is equivalent to roughly 562 Walmart supercenters.
“This year will generally be more of the same,” said Robin Trantham, a consultant for real estate data tracker CoStar said per past reports. “We expect many companies – and many sizable companies – to announce closures.”
The start of the year typically sees a number of closures after the holiday season, according to past reports, the number and breadth indicate a problem that goes deeper than business as usual.