Eastern Outfitters, the parent company of discounter Bob’s Stores and Eastern Mountain Sports, filed for Chapter 11 bankruptcy court protection on Sunday.
The company filed its voluntary petition in Delaware. The company is already in talks with Sports Direct International plc for the British sports retailer to become the so-called stalking-horse bidder for its assets. The stalking-horse bidder sets the level where bidding starts in a bankruptcy court auction in hopes of getting better offers for creditors.
In the Chapter 11 petition, the company listed creditors between 100 and 199. Total assets were estimated at between $100 million and $500 million, and total liabilities also estimated at between $100 million and $500 million. The petition said the debtor estimated there will be funds available for distribution to unsecured creditors.
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According to the petition, the company has been engaged in extensive discussions with SportsDirect.com Retail Ltd., the anticipated stalking-horse bidder and lender under the firm’s second lien debt, to provide a debtor-in-possession financing facility.
Among the top five unsecured creditors are: VF Outdoor Inc., Greensboro, N.C., trade claim, $768,837; Google Inc., Mountain View, Calif., services, $646,359; Wolverine World Wide Inc., Rockford, Mich., trade claim, $635,607; Carhartt, Dearborn, Mich., trade claim, $615,998, and Under Armour, Baltimore, Md., trade claim, $582,119.
Other unsecured creditors holding trade claims include Hanesbrands Inc., Winston Salem, N.C., $197,619; Fownes Performance Group, New York, N.Y., $171,843; Dan Post Boot Co., Clarksville, Tenn., $157,580; Fila Sports Inc., Sparks, Md., $110,277; Randa Accessories Leather Goods, Rosemont, Ill., $100,230; Wrangler, Greensboro, N.C., $88,577; Broad Factors Corp., New York, N.Y., $71,435, and Liberty Mountain Sports, Gateway Sandy, Utah, $62,518.
Eastern Outfitters was acquired by private equity firm Versa Capital Management last year out of bankruptcy proceedings. At the time, Vestis Retail Group was the owner of the Bob’s and Eastern Mountain operations. The Vestis bankruptcy also included the retail nameplate Sports Chalet, which was shut down during the bankruptcy proceeding. Versa had been an indirect owner of Vestis.
Versa Capital specializes in distressed companies. Its Wet Seal Inc. operation filed for Chapter 11 bankruptcy court protection last week to help the company wind down its operations, following the firm’s shuttering of store locations. Both Wet Seal and the retail operations under Eastern Outfitters have been hurt by changing consumer-shopping patterns. Many of the specialty chains that have filed recently are part of a wave of so-called Chapter 22 filings: Wet Seal, Eastern Outfitters, The Limited Stores and American Apparel Inc.
Other holdings under the Versa Capital umbrella include specialty apparel retailer Avenue Stores and performance fabric manufacturer Polartec.