G.I. Joe's Holding Company (dba Joe's Sports & Outdoor) filed for Chapter 11 bankruptcy protection March 4 -- two weeks after furloughing half its workforce at the company's Wilsonville, Ore., distribution center.
The company, founded in 1952, was acquired by Gryphon Investors of San Francisco, Calif., in 2007 -- click here to read the SNEWS® story. Originally called G.I. Joe's, the store changed its name to Joe's Sports & Outdoor in early 2007 -- click here to read the SNEWS story. Employing approximately 1,600 people, the retailer operates two stores in Idaho, 13 in Oregon and 15 in Washington.
In documents filed in U.S. Bankruptcy Court, Delaware, the list, which includes some significant outdoor brands, shows 30 of its largest unsecured creditors are owed more than $12.7 million:
Columbia Sportswear -- $888,292
Rocky Brands -- $707,048
Under Armour -- $647,873
New Balance -- $371,800
K2 Corp. – $363,775
Wolverine -- $332,647
Smith Sport Optics -- $298,636
Duofold -- $287,092
Salomon -- $267,190
Marmot -- $231,554
Quiksilver -- $228,419
Brooks -- $220,954
Although the retailer 's website also shows it carries fitness brands in its stores, including the likes of Horizon, Spri, Nautilus, Lifespan, Smooth Fitness and more, none were listed in the top 30 unsecured creditor's report. In those same court documents, the company listed both assets and debt ranging from $100 million to $500 million.
In a company statement, Joe's said it plans to keep all 30 of its stores in the Northwest operating and to pay its employees wages and benefits. The company indicated that $50 million it recently secured in debtor-in-possession financing would help with operational costs.
Insiders told SNEWS that Joe's was likely positioning itself to exit bad store leases easily, close underperforming stores, and possibly make ready for a sale of some or all of its stores. The idea of selling Joe's would jibe with what Gryphon Investors reportedly stated in early 2007 after the acquisition -- that it did not plan to hang onto Joe's for more than a couple of years.
SNEWS® View: While the economy might be the easiest culprit to point a finger at when trying to understand what led Joe's to this point, that would be taking the easy way out. We suspect the economy simply uncovered the retailer's challenges and laid them bare for all to see. One of our editors, in visiting a Joe's recently, had this to say: Having never been in one, I visited the Spokane Valley, Wash., Joe's Sports store. When I drove up, I was surprised to see a rather non-descript-looking rectangular building that was rather plain and looked like countless other sporting goods stores I have been to. The inside wasn't much better -- just a big open area with product parceled into departments, covering everything from camping and the outdoors to fitness and sporting goods. I had expected more -- more character, more personality, something that said this is why Joe's is special -- but in the end, it seemed like any other store. Even a tad worse because it was just blah and boring. The employees were friendly and very helpful. I was approached by a sales woman who asked if I needed help and I told her what I was looking for. She led me to it, opened the box so we could look at it and walked me to the counter. She was friendly, down to earth and made that part of the visit, at least, pleasant.
The smattering of commentary in blogs and chat areas about Joe's recent bankruptcy protection filing news are equally enlightening -- and should serve as a clear notice to any retailer in the outdoor or fitness space who wishes to stand out to customers -- being special is more than just calling yourself special:
>> Another ho-hum retailer that can only sell on price... no service -- and sales clerks that either don't care -- or don't know about the varied products they offer.
>> If you already know what you want and don't need help -- you can shop online... We need retailers that go back to real people on the floor that KNOW what they're talking about -- and sell service and knowledge over price. And we need CUSTOMERS that value the knowledge and support and buy from them. Too many low-class losers out there go to stores to get info -- then go home and buy online or buy Chinese crap from Wal-Mart. Then they wonder why stores that used to help them -- close. DOH!
>> Color me un-surprised. I went in there last weekend. The aisles are so disorganized that you can't find anything. Makes you think of Wal-Mart. Maybe they're trying to create that Wal-Mart feel, however, they don't have Wal-Mart prices. I went to buy my goods -- during a sale -- and there was one cashier for 10 customers. I re-shelved my goods and left.
>> I agree that they aren't losing customers due to the recession but due to poor selection and higher prices. They carry what generically all outdoor stores carry these days but in a haphazard organization and for premium prices. With Internet sales and Sportco/Sportsman's Warehouses, you either need lower prices, better service/specialization or carry hard to find inventory.
>> Sad, but it's a crowded section of the retail business. When I want something cheap / on the budget, I usually hit Big 5 / Sports Authority / Target. When I'm making a big purchase / quality purchase, I hit REI. Sadly, Joe's didn't fit in anywhere...
>> G.I. Joes as it used to be known -- never helped anyone... you either knew what you wanted... or you were on your own. So it's no wonder that stores like this are closing.
>> They were a jack of all trades and a master of none.
In the end, this is a tragedy for the vendors. At a time when retailers are canceling preseasons and trimming back on orders, the last thing any vendor needs is additional bad debt on the books. Because the trickledown effect of that spreads across all sectors of our industry.