MERIDEN, Conn. (BRAIN) — Vestis Retail Group, the owner of Sport Chalet, Eastern Mountain Sports and Bob’s Stores, filed a petition for Chapter 11 bankruptcy protection in Delaware on Monday, saying it has liabilities of more than $100 million. Vestis hopes to separate Sport Chalet from the other two chains, and sell EMS and Bob’s to funds advised by Versa Capital Management.
Vestis began store-closing sales at all 47 Sport Chalet locations on Saturday, while EMS will close eight of its 61 locations and Bob’s will close one of its 36 stores.
Vestis’ largest creditor is Nike, owed $7.3 million. Among its top 40 creditors are Accell North America (owed $1.37 million), Advanced Sports International ($600,000), Vans ($400,000), Osprey ($380,000), Trek-owned Electra Bicycle Co. ($375,000) and Woodman Labs/GoPro ($370,000).
The Sport Chalet website is no longer accepting orders. All the Sport Chalet locations will remain open as they run closing sales “for the next several weeks,” the company said.
EMS will close its locations in Christiana, Delaware; Dulles, Virginia; Foxborough, Massachusetts; Moorestown and North Brunswick, New Jersey; Philadelphia; Warwick, Rhode Island; and West Hartford, Connecticut.
The Bob’s location being closed is in South Portland, Maine.
Vestis bought Bob’s Stores in 2008, EMS in 2012, and Sport Chalet in 2014. EMS has historically carried such bike brands as Kona, Felt, Marin, Orbea, Masi, Bianchi and Jamis at select stores, but its website currently lists Strider as its only bike brand. It also sells components, apparel and accessories from brands including Shimano, SRAM, Pearl Izumi, Bell, Giro, Louis Garneau, Thule, Blackburn, Topeak and Kryptonite.
Sport Chalet carries Diamondback and Haro and P&A from brands including Bell, Giro, Nutcase, Pearl Izumi, Dakine, Fox, Topeak, CatEye and Serfas. Its stores also provide bicycle service and car rack installation.
In a press release, Vestis said Sport Chalet and EMS were each close to bankruptcy when purchased.
“We have made significant progress in stabilizing the businesses and improving overall performance across all our brands," Mark Walsh, Vestis’ CEO, said in the release. "As a result, EMS and Bob's are now delivering solid performance but have been burdened by limited financial flexibility due, in part, to the unique competitive pressures facing Sport Chalet. After reviewing a variety of strategic alternatives, we determined that the best path forward is to separate the businesses and confront the challenges that have been hindering our overall progress. We are confident EMS and Bob's will be well-positioned to thrive at the conclusion of the process."
Vestis said it hopes to keep operating the remaining EMS and Bob’s locations and their e-commerce sites and sell off those businesses to the Versa-advised funds by midsummer. Vestis has already secured a commitment for up to $125 million in debtor-in-possession financing from its existing lender, Wells Fargo Capital Finance, LLC, to continue operations. The bankruptcy court must approve that financing.
Versa specializes in acquiring companies that are in transition. It has previously owned shares in both EMS and Bob’s, and has advised Vestis. Versa also owns the Polartec outdoor fabric company.
More information: Vestis Retail Group reorganization website.
