City Sports Inc. has filed a Chapter 11 petition for bankruptcy court protection in Delaware.
The filing on Monday listed assets of $38.6 million, with liabilities of $39.6 million.
Among its top unsecured creditors, Nike USA Inc. was listed first with $1.3 million in trade debt. Under Armour was second, with $1 million in trade debt, and Asics America Corp. was third, also with $1 million in trade debt.
The company’s senior vice president and chief financial officer Andrew W. Almquist said in a court document that the company, a Boston-based specialty sports retailer, was founded in 1983. The retailer sells performance footwear, athletic apparel and equipment. As of Oct. 5, City Sports operated 26 stores in metropolitan locations in Massachusetts, Rhode Island, New York, Pennsylvania, Maryland, New Jersey and Vermont, as well as in Washington, D.C.
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According to Almquist, 2015 revenues were $45 million. The chief financial officer noted that revenues and profitability began to decline in August 2014, due to several factors including a competitive market for athletic apparel.
He also said the company has proceeded on a dual track comprised of reaching out to liquidators to conduct store closing sales for six to eight underperforming stores and reaching out to parties who might be interested in purchasing the retailer as a going concern. Also, in the event a sale doesn’t materialize, the company considered an orderly liquidation of its assets.
City Sports reached out to liquidation firms and received bids from two. It has a consulting agreement with Tiger Capital Group for inventory consulting and fixture disposition services for eight stores. Almquist said the company “continues to negotiate” with parties for the purchase of its operations, including the remaining 18 stores.
In case it can’t reach an agreement for the purchase of the company, Almquist said the retailer will seek approval to begin store closing and going-out-of-business sales “immediately in order to take full advantage of the upcoming holiday shopping season.”