After being seemingly rescued from certain extinction when it was announced that Copeland Sports was to be again managed by the founding Copeland family as part of a mid-August Ch. 11 bankruptcy reorganization, the sporting goods chain has hit some rough seas.
News coming into SNEWS® indicates that layoffs began in earnest the week of Oct. 23, with Oct. 27 being dubbed by insiders as "Black Friday." Wrote a member of the merchandising staff to clients in an Oct. 26 email obtained by SNEWS®:
"I wanted to take this time to say it's been a pleasure working with you. I wish I was writing to say everything's just peachy here at Copeland's but that's not the case," the employee wrote. "It's been tough here as you know…. I don't know what the future holds, and I'm getting excited for the unknown possibilities. As of now I don't have plans but I do know it's just a matter of time till I'm no longer here…."
In addition, several vendors and pending vendors have been told the San Luis Obispo, Calif., sporting goods chain had suspended purchases, also about Oct. 23, with no reason given.
"We've not been given an explanation why," said Reina Reeves, national sales manager for SportsArt Fitness, also an unsecured creditor in the bankruptcy.
Others have told us that the Copeland warehouse is as good as empty.
Paul Goldberg, sales manager for GoFit, said he had an appointment with a fitness buyer at the Health & Fitness Business Show in early August, but it was cancelled suddenly without explanation. Although the company filed the bankruptcy reorganization about 10 days later with promises of closing a few stores to get finances under control, Goldberg said his company's program has been put on hold.
"The rumors of their bankruptcy started circulating heavily at the show," Goldberg added, "and all serious talks about doing business with us ceased at that point."
Calls by SNEWS® to executive Mike Copeland and to CEO John Brincko were not returned. Maggie Bartels, vice president and GMM, declined comment. Notable is that in August the company announced its new CEO was Barry Soosman, who was formerly an executive vice president of Guitar Center Inc., with a stated expertise in specialty retailing. When SNEWS® called and asked for him, an operator hesitated then said he was no longer with the company.
"He didn't work there very long," SNEWS® commented.
"No, he didn't," the operator said.
Brincko is the founder and CEO of Brincko & Associates (www.brincko.com). He is known as a restructuring and turnaround manager, as well as an expert in crisis management and financial analysis. His company also liquidates companies, including Consolidated Freightways four years ago after he spent three months as CEO. Brincko has also turned around other firms, including struggling housewares store, Stroud's.
At the time of the bankruptcy filing, Tom Copeland said in a statement that he and his brother Jim and son Mike were confident they could right the foundering ship again once they were back at the helm. Said Tom in August, "We successfully ran the business for over 30 years -- and we'll do it again."
Still, the company noted it would be forced to shut about eight of its 31 stores in four Western states in August. In September, the company announced plans to close 11 stores -- adding three more to the aforementioned eight -- in its bankruptcy filing.
Bankruptcy papers filed in September in the court in Delaware, where the company is listed as a corporation, listed total assets of $52.62 million and total liabilities of $53.87 million. Of that were $28.7 million in secured claims, including $14.4 in an unsubordinated debt to Tom and Jim Copeland. Employees are due just under $1 million, and vendors are due $22.4 million, with the largest being sporting apparel and footwear manufacturers such as Nike and golf companies such as Callaway. Among fitness vendors are a few including Aerobics, Spri, Nautilus, Horizon and SportsArt.
Said one insider, "As far as I know, this is the end of Copeland Sports. It is going bye-bye."
To read our Aug. 16, 2006, story, "Copeland Sports files Ch. 11, Copeland family to re-acquire ownership," click here.
SNEWS® View: We can't vouch for the chain going bye-bye; we can only paint a picture with the colors we have. What do we have? We have a turnaround expert also known for liquidation at the helm. We have purchases and buying stopped cold and a nearly empty warehouse. And we have layoffs at corporate. This could mean a few things: It could indeed mean au revoir, but not necessarily. It could also mean that the chain is being sold, either in whole (not as likely) or in parts (more likely, with competitors cherry-picking the locations they can use). If it's being sold in any way, then buying would certainly stop, as it has. We have heard a purchase deal could be coming down and, if it does, it will happen very quickly but most certainly by early November. Copeland has been overtaken a bit in recent years by other players such as Sport Chalet and G.I. Joe's, which have updated their product assortment and stores to cater to today's market tastes better than Copeland has. Said one observer, "They have to make some changes in their inventory mix, or they'll be left behind in the dust quickly." We hope that hasn't already happened.