Sunday, November 3, 2024

Popular sporting goods chain saved from bankruptcy – by better-run UK retailer

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A New England outdoor clothing and equipment retailer has been saved – by a UK chain of shops selling similar items.

Eastern Mountain Sports (EMS) had filed for bankruptcy along with its sister chain Bob’s Stores after they struggled to compete with bigger rivals like Dick’s. 

While Bob’s – which sold athletic and casual clothing across six states – went out of business in July after shutting all stores, bosses looked for a buyer for EMS.

This week, Mountain Warehouse – the UK’s biggest outdoor gear company – struck a $10million deal to buy the brand, website and seven stores that were profitable. 

The agreement saves more than 100 jobs at EMS, which filed for Chapter 11 protection on June 18.

Eastern Mountain Sports (EMS) had filed for bankruptcy – but it has been saved by UK retailer Mountain Warehouse

Together, Bob’s and EMS had owed PNC Bank $30 million, plus another $27 million in unpaid rent and other debts. 

In stark contrast, Mountain Warehouse last month reported  the highest-ever annual sales in its 27-year history of $510million.

The group, which employs more than 3,700 people, also made pre-tax profits $34.6m and announced it had opened 20 new stores this year.

Bob’s had its final day of business on July 14. The 40-year-old chain – which operated in Connecticut, Massachusetts, New Hampshire, New Jersey, New York and Rhode Island – is now gone forever.

But EMS – which started life in the US in 1967 when two friends on a fishing trip decided that camping gear ‘shouldn’t break the bank ‘ – has a new lease of life.

The first store opened in Wellesley, Massachusetts. It grew dramatically over the years by partnering with leading outdoor brands such as The North Face, Smartwool and Oboz, and developing its own-label product range.

EMS has changed ownership several times recently and ran into difficulty after GoDigital Media acquired the business from Frasers in May 2022. 

That transaction was largely funded by debt, putting a strain on its cash flow, and forcing management to file a Chapter 11 restructuring petition.

Mountain Warehouse launched in the UK with a single shop in 1997 and has grown to have more than 370 stores in nine countries.

Bosses say the purchase of EMS allows it to grow its store count in the US – where it has 50 stores. At the same time, they plan to take the EMS brand into more territories including Canada and Europe.

Mark Neale, founder and CEO of Mountain Warehouse, says that the two companies have shared values and the same commitment to helping everyone enjoy the great outdoors. 

‘We plan to retain the iconic EMS brand, which has a great heritage and DNA, and resonates with huge numbers of long-standing customers,’ Neale said. 

‘We will also continue to work with the highest-quality and best-known outdoor brands in the world to stabilise and then grow the business.’

‘We are convinced that there is a great business here, with a tremendous pedigree, and passionate people who can help us understand the market even better and create a bright future.’

Bricks-and-mortar retailers are struggling generally but those selling sporting goods have been hit hardest.

Families most affected by inflation have chosen to spend of food and essential clothing, rather than non-essential items like sports goods. Sports retailers had received a boost during the pandemic as people attempted to keep fit. 

Bob’s and Eastern Mountain are not alone in having financial problems in 2024. Retailers, already reeling from the pandemic, have faced higher costs of business, particularly labor.

Bob's Stores has now shut all its locations. This is an earlier closure at 499 Sunrise Highway in Patchogue, New York in 2019

Bob’s Stores has now shut all its locations. This is an earlier closure at 499 Sunrise Highway in Patchogue, New York in 2019

Eastern Mountain Sports sells outdoor clothes

Eastern Mountain Sports sells outdoor clothes 

There were almost 2,600 store closures in the first four months of 2024. If that trend continues, almost 8,000 will have been lost by the end of the year.

In recent months, Walmart has closed three more of its underperforming locations. Best Buy closed ten in March.

Dollar stores have been hit hard too, with 99 Cents Only announcing in April it would shutter all 371 of its locations across California, Texas, Arizona and Nevada. 

The 1,000 closures of Family Dollar and its sister company Dollar Tree will happen over the next three years. 

Express – a mall staple – filed for bankruptcy in April and said it would shut 95 Express outlets alongside all of its UpWest stores.    

At the start of May, Rue21 – the teen fashion chain that is a fixture in malls across America –  also said it will shut all  its 543 US stores after going bust.

Badcock Home Furniture & More said at the end of July it is closing all its 380 stores dotted around the South after it fell into bankruptcy earlier this year.

Last week, it merged that Big Lots is shutting 315 stores across multiple states as its financial woes worsen. 

And this week, it was reported that Macy’s has lined up 55 stores for closure this year,

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