A Minnesota-based sporting goods chain may close more than half of its stores as it navigates through Chapter 11 bankruptcy proceedings initiated in March, according to a report from the Wall Street Journal.
An investor group led by Camping World won a bankruptcy auction last week for much of the company’s inventory, including its Overton’s boating business and intellectual property, all valued at $390 million, Reuters reported Friday.
The company will assume leases for just 17 of Gander Mountain’s 162 stores, with the option to secure more in the future — though how many more remains to be seen, according to the Wall Street Journal.
Camping World Chairman and CEO Marcus Lemonis told the newspaper he didn’t think more than half of the Gander Mountain stores would survive.
“The structure of our deal provides much flexibility and will not only allow us to refine the inventory selection and select only those stores which are profitable or we believe have a clear path to profitability, but will also allow us to immediately offer our comprehensive portfolio of services, protection plans, products and resources to the existing Gander Mountain and Overton customer base and in stores in which we elect to operate,” Lemonis said in a press release Friday.
“While we are obligated to assume a minimum of seventeen leases, our designation rights will allow us to operate stores and retain employees at a number to maximize profitability,” he said.
Lemonis said Camping World, the largest recreational vehicle dealer in the country, won the auction with a bid of $38 million.
Brent Moody, Camping World’s chief operating officer, said the company will focus on corporate overhead and expenses as it “right sizes” Gander Mountain’s inventory.
“Camping World’s plan is to … operate only in retail locations with occupancy costs that we believe support profitable operations … consistent with our other operating segments,” he said.
Lemonis said he hopes the liquidation plan will give both companies a fresh start.
“The liquidation of the existing Gander Mountain inventory will allow us to start with a clean slate of what we consider the appropriate mix and level of inventory, including the addition of Camping World and Overton offerings where appropriate, and our lease designation rights will allow us to select only those stores in appropriate locations with appropriate cost structures,” he said.
Gander Mountain filed for Chapter 11 bankruptcy protections in Minnesota court on March 10, indicating its intention to shutter 32 stores in 11 states and liquidate more than $500 million worth of assets, Guns.com previously reported.
Court documents show the company will not sell the identifying information of the 1.8 million customers listed in its firearms registry. Instead, the names of 817,000 active customers and more than 1 million inactive customers will be sent to the Bureau of Alcohol, Tobacco, Firearms and Explosives, according to court documents filed Wednesday.