Sportsman Warehouse Filed Chap 11 Yesterday

[Rembrandt]

When people don't pay their bills, companies have a hard time expanding the business to meet demand and prices will be raised to offset the losses. Federal got stiffed 6.4 million and Winchester Olin 2.4 million.


http://deseretnews.com/article/1,5143,705292485,00.html


Sportsman's Warehouse in bankruptcy

By Dawn McCarty

Bloomberg News
Published: Sunday, March 22, 2009 10:38 a.m. MDT

Sportsman's Warehouse Inc., an operator of retail sporting-goods stores, sought bankruptcy protection from its creditors citing the economy for its action.

The company said it had combined assets with a book value of $436.3 million and combined debt of $452.2 million as of Dec. 31 in Chapter 11 documents filed early today in U.S. Bankruptcy Court in Wilmington, Delaware.

"Sportsman's Warehouse is another retailer victim of the worldwide global recession," Rourk Kemp, chief executive officer, said in court papers.

The Midvale, Utah-based stores serves as a "one-stop supplier" of equipment, apparel and footwear related to fishing, camping, hunting and other outdoor activities.

The company recently sold 15 stores and is in the process of closing 23 others. It operates 29 stores in the U.S.

The company and its affiliates' 30 largest creditors without collateral backing their claims are owed about $34.2 million, according to court documents. The three biggest unsecured creditors are Federal Cartridge Co./Atk, owed $6.4 million; Browning Safes and Acc and Browning Arms, owed $3.2 million; and Olin Corp. Winchester, owed $2.4 million.

 

[Hardtarget]

I work for a very small company. I've been saying for years that our customers need to be paying "as we go". Too many try to run behind a little bit more every month. They collect before delivery...but they want to hold back on payment to us.

Seems as though this credit stuff is hard on any size company. That bankruptcy has got to effect prices. ouch!

Mark

 

[Wildalaska]

Spotsman Warehouse Filed Chap 11 Yesterday

Use your gift cards now


Sportsman's Warehouse files for bankruptcy
Sat Mar 21, 2009 9:19am EDT

NEW YORK, March 21 (Reuters) - Sportsman's Warehouse, a Utah-based sporting goods retailer, on Saturday filed for Chapter 11 bankruptcy protection citing a liquidity crisis triggered by declining sales and the global economic slowdown.

The company, which sells goods relating to fishing, hunting, camping and other outdoor activities, said it intends to operate 29 stores as a going concern, after already announcing plans to close 23 stores, and sell another 15.

It listed assets of $436.4 million and liabilities of $452.1 million, according to court papers.

The company is 25 percent owned by an affiliate of Seidler Equity Partners, according to court papers. The company said it has about 3,245 employees.

The case is In re: Sportsman's Warehouse Inc., U.S. Bankruptcy Court, District of Delaware, No. 09-10990.

I saw it coming

Declining sales? Bwaaaaaaaaahahahah...try mismanagement

WildhurryupAlaska TM

 

[overkill556x45]

Global economic slowdown? In the guns & ammunition sector? Uh huh....

Maybe the higher-ups shouldn't have opted for the fleet of gold-plated Gulfstream VI jets, complete with cocaine and strippers.

Honestly, how do you go out of business selling guns right now? That's like having a cupcake stand outside of a weightwatchers meeting--and somehow losing money.

I really liked my local Sportsman's. Sad to see them go.

 

[Mr Odd Six]

SW was bought out by a Candian company 2 weeks ago.

well they bought 15 or so stores around the country in the northwest and medwest.

They promise in 60 days to have better prices and more inventory than Cabela's.

I have both in my hood, and the shelves are bare in both. They raised all the prices to stupid in the SW.

I wont be going there for a few months

 

[jgcoastie]

With the massive increase in retail sales in the firearm industry, I think they'd have a hard time selling a theory of "declining/poor sales"... Sounds like they managed their company like our government handles its own finances... They spent money they didn't have and probably will never get...

 

[pendennis]

We had a SW here in Michigan opening in late 2007. It was located in the near-Detroit suburbs (Allen Park), not exactly a prime location for a sporting goods store, considering Dick's, Bass Pro Shop, Dunham's, etc., were opening retail stores in the direction of population growth.

I questioned their advertising model right after they opened. They didn't have any exposure to major media of any type. No television, radio, newspapers, etc. The relied on published fliers at the store, and word-of-mouth. In the twenty-first century, no retail penetration occurs without modern media advertising.

They also suffered badly from spotty inventory. They were out of primers for two months. They still carried lead shot @ $50/bag, long after prices had headed south and others were selling for under $40/bag.

No one in the area was surprised when they closed the Allen Park store after only nine months being open.

 

[JWT]

I find it difficult to blame the economy for their problems. Guns and ammo are flying off the shelf but the local Sportmans has been essentially out of stock for months - probably due to their financial difficulties. Hope they can come out of chapter 11 and salvage the outlets they still have but it certainly won't be easy if they can't get merchandise to sell.

 

[azredhawk44]

They've been complete morons... gun shops don't go bankrupt in the first six months of a gungrabber presidency.

 

[Glenn E. Meyer]

Well, Az - when I was there - they told me the shelves were bare because of Obama!

Unfortunately, Academy across the street had stuff!

Use the gift card - for what - overpriced (even with a 10%) discount crap. Or 30% off Jerky!

 

[azredhawk44]

Yep, they told me that too until someone here enlightened me a few weeks ago as to their real plight.

Never trust the gun counter guy, is all I've gotten out of that.

 

[Jericho]

Gander Mountain

I've seen several new GM stores here in VA. They have a very impressive array of goods and guns. I hope they are able to stay in business through these hard times.

 

[KyJim]

I questioned their advertising model right after they opened.

Same thing here. The only advertising they did when they opened was an insert in the local newspaper on Sunday. They were open a couple of months before I even knew it.

 

[Erik]

It does not surprise me. Poor business model, mismanagement, whatever... the writing had been on the wall for some time.

 

[HiBC]

The one we have in Loveland,Co seems to get good business,but yeah,it could be the buyers are a bit misguided at times.As much as I enjoy fine side by sides,etc,I wonder if the inventory turns over on the multi thousand dollar guns.
It is nice to be able to pick up and touch a lot of items,but with me,I just don't get the warm fuzzy spending with the big box.
A big part of my gun fun life has been going to see the old time gunsmith/gunstore small shop,and knowing those guys.The ones who know me and might call and say "I have a new toy you may want to look at.
The ones who have new plunger tube for a 1911,and install it while I wait,then wave me off when I reach for my wallet.

I try to make my local small shop my first choice place to spend my buck.

But,hey,they are too big to fail!!What's another Trillion! Bailout!

 

[Stiofan]

The 2 Sportsman's Warehouse stores in Spokane Valley and Coeur D Alene were sold to the Canadian company. They are already refusing to honor the SW gift cards. As for beating Cabelas here in Northern Idaho, well Cabelas made a profit last quarter, although lower than usual, but this new company needs to run very hard and very fast to survive.

The low price leader in the area is Black Sheep, an independent which is selling tons of guns and ammo, but they already had to close one of their three stores (mostly clothing) in the area, and the other big sporting goods retailer, Joe's filed bankruptcy last month.

It's not the guns and ammo dragging these retailers down, it's the market downturn for the other items in the store,
and the lack of cash flow and credit.

In times like this your small local retailer probably has more ability to survive than these large players.

 

[hikingman]

Ch. 11 is to "reorganize" and a popular website definition added the following: "At the same time, it gives dishonest management the opportunity to loot the firm's assets while the case is before the courts." Not making any accusation, just quoting a popular site.

This begs the questions, if large cos. such as Cabela's and GM are surviving the current economic climate, what happened here? A significant portion SW's biz was from the Internet, so they weren't in-store only?

 

[colostomyclown]

awful customer service here in utah. no worries on this one from me. hopefully this bodes well for smaller operations. mom and pop all the way.

 

[Big Don]

I've got a buddy who works for the local SW and his latest (part time) paycheck bounced!
He was told the Reno, NV and Rocklin, CA (his store) locations were supposed to stay open. We'll see about that.
Ditto the gripe about service/knowledge at the gun counter. The Rocklin store had some very knowledgeable people but they were offset by those who didn't have a clue.
The handgun display has been bare for several weeks and the ammo is essentially gone. Bummer on all counts.

 

[FrankenMauser]

There are a lot of factors that could be cited for their failure.

Some of my favorites:

1. Like Boston Market, Sportsman's went too big, too fast.

2. You don't make money selling new guns. The mark up on a new gun is trivial. When the original store (Midvale, UT) stopped buying and selling used guns, they lost a lot of profitability. On the firearms side of the store, money is made on used guns, reloading components, ammunition, and accessories. They couldn't keep the money makers in stock, and lost the game.

A significant portion SW's biz was from the Internet, so they weren't in-store only?

I must laugh. They have no internet business.