City Sports Inc. is planning to liquidate all of its 26 stores after failing to find a buyer in bankruptcy proceedings.
The Boston-based chain filed for Chapter 11 bankruptcy in October with plans to close eight of its locations and seek a buyer for the remaining 18. The company needed to secure a buyer by Oct. 30 in order to maximize liquidation sales during the holiday selling period, according to court documents.
Hilco Global and Gordon Brothers Retail Partners combined on a bid that won an auction this week and plans to start going-out-of-business sales at the remaining stores on Friday.
City Sports also sold its intellectual property, including the City Sports name, for $400,000 to Soccer Post, which a soccer-gear retailer with stores in 16 states. According to the Wall Street Journal, Blake Sonnek-Schmelz, owner of Soccer Post, said he plans to launch a retail operation under the City Sports name next year.
The sales will be presented Thursday to a bankruptcy judge for final approval.
City Sports was founded by high school friends Mike Kennedy and Eric Martin in 1983 with a location on Massachusetts Avenue. The company was acquired by the
Highland Consumer Fund in 2008 and ambitious growth plans were announced. The late Thomas Stemberg, who founded
the Framingham office supply chain Staples Inc. and was a managing
general partner at Highland, said at the time that he thought City
Sports could eventually grow to include 300 locations.
In an affidavit filed in Delaware’s bankruptcy court, Andrew Almquist, SVP and CFO at City Sports, said that starting in August 2014, the company’s revenue and profitability declined due to several factors, including “the extremely competitive market for athletic apparel (especially from Nike, Asics and Under Armour), still struggling national economy and record setting weather in the Northeast impacting the sale of various types of athletic apparel.”
In response, numerous initiatives were undertaken to improve its performance, including engaging financial advisors, FTI Consulting, Inc., to identify opportunities to reduce costs. A failure to renegotiate leases led to the decision to file for bankruptcy.
