Vestis Retail Group, parent company of EMS and Sport Chalet, to separate businesses
Sport Chalet, Eastern Mountain Sports and Vestis Retail Group all separately filed for Chapter 11 bankruptcy protection in Delaware court early Monday morning, according to court records.
Sport Chalet announced Saturday it would be closing all of its retail stores over the next few weeks and shut down its website except for a notice explaining the closure. Gift certificates and rewards for Sports Chalet can be used at EMS and its clothing chain, Bob’s Stores, which also filed for bankruptcy, until July 29 if they are not used at Sport Chalet by the end of April.
Vestis Retail Group, parent company of EMS and Sport Chalet, issued a press release Monday morning that it would restructure the company by "separating" its businesses. Eight Eastern Mountain Sports stores and one Bob's would be closed along with all Sport Chalet locations.
"When Vestis first acquired EMS and Sport Chalet, each company faced significant operational challenges and was on the verge of liquidation," Mark Walsh, CEO of Vestis, said in the press 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."
Eastern Mountain Sports locations will be closed in Christiana, Del., Dulles, Va., Foxborough, Mass., Moorestown and North Brunswick, N.J., University of Pennsylvania, Warwick, R.I., and West Hartford, Conn. Real estate costs at those locations are "unfavorable and have prevented the store from achieving sufficient profitability," Vestis' press release said.
Ongoing store closure blowout sales at some Sports Authority locations - which has also filed for bankruptcy protection - have created unusual competition for Vestis, Walsh said in court papers, according to Bloomberg.
Vestis proposed selling EMS and Bob's this summer to other funds managed by Versa Capital Management, which also owns Polartec.
In Eastern Mountain Sports’ bankruptcy filing, its 40 largest creditors – owed millions of dollars – included Nike, The North Face, Prana, Wolverine, Under Armour, Marmot and Carhartt.
Versa Capital Management which announced in December that it would be closing Polartec’s iconic Massachusetts factory.