Sports Authority files for Chapter 11 protection, plans store closings – Chicago Tribune

Sports Authority filed for Chapter 11 bankruptcy protection early Wednesday and will close or sell about 140 stores and two distribution centers, including several Chicagoland locations.

The Englewood, Colo.-based sporting goods chain has 463 stores in 41 states and Puerto Rico. The store closings are expected to take up to three months. Closing sales could begin as soon as Thursday.

Sports Authority will seek to close or sell several Chicago-area stores, including its locations at Water Tower Place, as well as in Calumet City, Matteson and Northbrook, the Wall Street Journal reported. A Romeoville distribution center will also be affected.

Sports Authority stores will remain open and operating on normal schedules during the Chapter 11 process, the company said. The company’s website will continue to function, and the chain plans to honor warranties on items purchased at its stores or online.

“We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry,” CEO Michael Foss said in a written statement, adding that the company needs fewer stores as consumers increasingly shift to online shopping.

The retailer has 35 stores in the Chicago area, not including the Romeoville distribution center. A list of which Chicago stores will be shuttered has not been made public and will be determined through the Chapter 11 process, according to company spokesman Steven Goldberg.

The retail industry as a whole has struggled with the consumer move to online shopping, trying to find ways to lure customers to brick-and-mortar stores instead. Macy’s Inc. has opened Macy’s Backstage, in order to go head-to-head with discount retailer T.J. Maxx. And J.C. Penney Co. is using store-label offerings to fight against pricing pressures from online rivals and recently launched a new campaign called “Get Your Penney’s Worth,” which offers certain store-label items for pennies.

In a letter to customers posted on the company’s website, Foss said that Sports Authority’s long-term plan includes upgrading stores and improving its website.

Foss said that The Sports Authority Inc., which is privately held, has received interest from third parties that may want to invest in or buy some or all of the business. The company plans to continue evaluating all of its options, he added.

Sports Authority said it expects to have sufficient liquidity during the Chapter 11 process when factoring in cash from operations and anticipated access to as much as $595 million in debtor-in-possession financing.

Sports Authority made its Chapter 11 filing in the U.S. Bankruptcy Court for the District of Delaware.

Tribune reporter Corilyn Shropshire contributed.