Modell”™s Sporting Goods, a family-owned retailer that as of today had approximately 115 stores in operation and an estimated 3,600 employees, filed for Chapter 11 bankruptcy protection yesterday.
At one time the chain had 153 stores. The company had been attempting to avoid a bankruptcy filing and took steps such as previously closing some of its stores and seeking outside investors.
The filing was made in a federal court in New Jersey by the law firm Cole Schotz P.C. Documents were signed by Mitchell B. Modell, the company”™s president and CEO, along with a company director Bernard A. Katz.
According to Modell”™s store directory, as of this morning it was operating stores at 843 Pelham Parkway in Pelham Manor and in New Roc City at 29 LeCount Place in New Rochelle.
Connecticut stores still on the list included at 2113 Summer St. in the Ridgeway Shopping Center in Stamford, 148 Boston Post Road in Bridgeport, 1397 Boston Post Road in Milford and 3067 Berlin Turnpike in Newington.
Modell”™s also has operated stores in New Jersey, Pennsylvania, Massachusetts, New Hampshire, Delaware, Maryland, Virginia and the District of Columbia.
“This certainly is not the outcome I wanted, and it is one of the most difficult days of my life,” Mitchell Modell said. “But I believe liquidation provides the greatest recovery for our creditors. We have partnered with Tiger Capital Group to liquidate the remaining stores beginning Friday morning, March 13.”
Modell said that the return from Tiger having previously liquidated 19 stores was “beyond spectacular.”
The company said that online sales would continue during the process of closing its brick-and-mortar operations.
The bankruptcy filing involved about a dozen different entities related to the chain”™s operations. It showed liabilities of approximately $288 million and assets of approximately $220 million. It said there are approximately 11,000 creditors and parties-in-interest, including current and former employees.
A list of creditors showed Adidas had an unsecured claim of $8.9 million, Nike had a claim of $8.7 million and Under Armour had a claim of $3.7 million.
The business was started in 1889 by Morris A. Modell. The fourth generation of the Modell family now operates it. The corporate headquarters are in Manhattan.
In a YouTube video posted on Feb. 21, Mitchell Modell explained that Morris, his great-grandfather, was from Russia and had a pushcart on Cortlandt Street in downtown New York. “He was there peddling hats, gloves, shirts, everything,” Modell said. He said that the fifth generation of the family was in the wings ready to enter the business.
Modell said that when a newspaper article appeared last year about the company”™s financial position, some of his suppliers stopped shipping and he found it difficult to get credit.
“I received $35 million less in receipts and dropped $50 million in sales,” Modell said. “On top of a warm winter, on top of no snow, lousy teams (the stores sell team-branded merchandise) led us into a liquidity crisis in January. This is unlike last year when an article turned us upside down. This is now, my back”™s to the wall and I gotta figure out what am I gonna do.”
Modell explained that he had approached his landlords and vendors and asked them to work with the company, and that he had also approached outside strategic investors.
“For literally millions of families, it”™s meant affordable, quality sporting goods for decades. People love our brand. It”™s not a tarnished brand,” Modell said of the company.
Over the years, Modell”™s has faced direct competition from specialty chains such as Dick”™s Sporting Goods and Sports Authority in addition to retailers such as Target, Kohl”™s and Walmart.
