KAILUA-KONA — No Hawaii stores are among the 140 Sports Authority locations on the chopping block after the sporting goods chain filed for bankruptcy early Wednesday.
Sports Authority operates eight stores across the islands, including two on the Big Island — one in Kailua-Kona and one in Hilo. None of the Hawaii stores are among the third of the company’s 463 stores it plans to close, according to a planned closure list and local sources.
The company filed for bankruptcy protection with a plan to slim down after missing out on the fitness boom that’s been a rare bright spot in retail. The company said Wednesday that it will close the stores while trying to preserve $124 million in tax deductions.
Tax savings “could substantially enhance the debtors’ cash position,” Bloomberg News reported the company said in court papers, indicating that it planned to seek a special court order that might allow it to sell assets without losing the ability to carry forward past net operating losses to reduce future taxes.
Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co. and TPG Capital have agreed to provide a $595 million loan that will help Sports Authority operate as it restructures in bankruptcy, according to the court papers filed along with the bankruptcy in Wilmington, Delaware.
In addition to the retail closings, Sports Authority distribution centers in Denver and Chicago will be shut down or sold. Gordon Brothers Retail Partners LLC and Tiger Capital Group LLC have been retained to run store-closing sales, according to court papers. The closing process should take three months, the company said.
Sports Authority has fallen far since a $1.3 billion buyout in 2006 piled it with debt. Back then, the chain was even with Dick’s Sporting Goods Inc. in sales. Today, Dick’s has hundreds more locations and takes in almost twice as much per store, making it the U.S. leader in selling athletic gear, while Englewood, Colorado-based Sports Authority has been hampered in its ability to expand or innovate.
Sales last year at U.S. retailers were their weakest since 2009, according to the Commerce Department. But as big-box giants and online merchants encroached on clothing stores and consumer electronics chains, sports were one of the few healthy areas, with companies including Target Corp. and Gap Inc. expanding their fitness offerings.
Bloomberg News contributed to this report.