After 35 years in business, with the last four of those under management of a private investment firm, foundering Copeland Sports will return to ownership and management by the founding Copeland family as part of a Ch. 11 bankruptcy reorganization filed this week.
In a statement released by the company Aug. 16, the ownership and management changes were announced that put brothers Tom and Jim Copeland and Jim's son, Mike, back at the helm to try to set the sporting goods retailer afloat again.
"With our knowledge of the company and the sporting goods industry, we can put the company back on sound footing again very, very quickly," Tom Copeland told the San Luis Obispo (Calif.) Tribune. "We successfully ran the business for over 30 years -- and we'll do it again."
Copeland Sports is still based in the California town of San Luis Obispo on the central part of the coast.
The reorganization papers were filed Aug. 14 with the U.S. Bankruptcy Court, Delaware, the state where the company is listed as a corporation. According to court documents obtained by SNEWS®, the company estimated it had between 1,000 and 5,000 unsecured creditors, with estimated debts of between $50 million and $100 million. Estimated assets were listed on the documents as $50 million to $100 million.
Among the top 25 creditors are mostly footwear/apparel and golf companies, with Nike USA being owed the most ($1,685,181), followed by Callaway Golf ($983,091) and Sole Technology ($825,950). Others included New Balance, Taylor Made, Titleist, adidas America and Reebok, among others. The sole fitness equipment supplier on the top-25 list is Nautilus, which is listed as owed $254,539.
The court papers were signed by then president and CEO Brian Allen, but the company immediately announced it had named a new chief executive officer, Barry Soosman, who was formerly an executive vice president of Guitar Center Inc., with expertise in specialty retailing. With rumors circulating for weeks before the Aug. 14 filing, notable is perhaps that the papers had been neatly typed -- except the date of the filing, which had been penned in between the typed "August" and "2006."
Plans include closing eight of the current 31 stores in four Western states to pare back down to about 23 stores, although which ones were to be closed had not yet been determined.
The statement said that the company had reached an agreement with Wells Fargo Retail Finance LLC on a $25 million debtor-in-possession credit facility, and the Copeland family will make an additional secured loan to the company of $5 million to pay down the Wells Fargo secured claim and increase borrowing availability under the credit facility. The Copeland Sports statement said the company believes the credit facility, along with funds generated by operations, is sufficient to meet its capital requirements.
The Aug. 16 company statement noted that to encourage suppliers to help restock the stores for back-to-school and holiday, the Copeland family had also agreed to voluntarily subordinate its lien rights as holders of over $13 million in Senior Subordinated Notes.
"Copeland Sports has always enjoyed strong relationships with our suppliers, and want to make sure they know they can continue to do business with the company," Tom Copeland said in the statement. "We built this business, and we intend to do everything possible to keep the confidence of our customers and creditors."
The next court hearing is Sept. 8 to determine, among other things, the timing for required court schedules and statements.