Sporting goods store Sports Authority announced on Wednesday that it, along with several of its affiliates, has filed for Chapter 11 bankruptcy. The filing will allow the organization to restructure to achieve better financial positioning going forward. Almost all consumer-facing aspects of the store will remain relatively untouched, including store hours, online shopping, and the store’s loyalty program.
Under Chapter 11, an organization proposes a plan of reorganization to continue operations while gradually paying off debts. While this certainly doesn’t spell the end for Sports Authority, it will take significant realignment to reach the financial success the brand has enjoyed in past years.
“We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry,” said Michael E. Foss, Chief Executive Officer of Sports Authority. “We intend to use the Chapter 11 process to streamline and strengthen our business both operationally and financially so that we have the financial flexibility to continue to make necessary investments in our operations.”
The company’s loyalty program, Sports Authority League, will operate as normal throughout the filing process. The program offers savings to members based on spend, and has the unique twist of offering additional rewards based on a member’s physical activity in a linked MapMyFitness app. Members earn points for linking the app to their “League” accounts, as well as one additional point for every mile run, walked, or cycled.
Foss is optimistic about the company’s future.
“Given our strong brand recognition with a large and growing customer base, valuable business assets and loyal Team Members, we have received strong interest from third parties interested in investing in or buying some or all of Sports Authority,” he said. “We intend to continue evaluating all options to maximize the value of the organization and position us for sustainable success in our industry. As it has been from the beginning of the strategic business review process, our primary objective is doing what is in the best interests of our employees, customers, suppliers and creditors.”