A sporting goods distributor recently filed for bankruptcy protection in another state. The Chapter 11 bankruptcy filing was completed on a recent Tuesday. Filing for bankruptcy can be a beneficial move for companies in Massachusetts that are having trouble overcoming their business liabilities.
The sporting goods distributor operates a total of 68 stores in seven different states, including stores such as MC Sporting Goods and MC Sport Outdoors Centers. The company said it has not been able to compete with resellers online. In addition, there is more competition with distribution channels and specialty retailers. The company also said that consumer preferences are changing as well.
The company has 1,300 workers, both part time and full time. It has recently advertised steep discounts along with clearance sales. The company currently does not own real estate, and it makes a $1.2 million payment every month. However, it lost more than $5 million on sales of more than $170 million during the most recent fiscal year. The company’s landlords, vendors, associates and other professionals made an effort to restructure the operating performance and balance sheet of the company, but they could not arrive at an agreement on an out-of-court proposal that was viable.
The sporting goods distributor plans to use the Chapter 11 bankruptcy filing to address its immediate debt issues through commencing liquidation sales at all of its stores. At the same time, it will be looking for other financing options. When companies are facing stiff liability issues in the state of Massachusetts, Chapter 11 bankruptcy filings can provide them with the fresh financial starts they need.
Source:Â mlive.com, “MC Sports files for bankruptcy, begins liquidation of stores“, Jim Harger, Feb. 14, 2017