Luke’s Locker, which filed for Chapter 11 bankruptcy protection on January 24, received court approval to retain Joseph Sullivan Associates (JSA), a business advisory firm, as its chief restructuring officer.
Sullivan and his firm will assist and advise the Dallas-based running store with the analysis and evaluation of its financial position, financial history, operations, competitive environment and assets, and help determine the optimal turnaround strategy, including a potential restructuring, refinancing and/or sale of assets.
Luke’s Locker now operates four locations in Dallas, Fort Worth, Plano and Southlake. The filing in the U.S. Bankruptcy Court’s Eastern District of Texas came less than a week after it closed five stores.
In its request to retain JSA, Luke’s Locker noted that despite a “fiercely loyal customer base,” Luke’s Locker has been impacted by online competition and was also impacted by an over-aggressive expansion effort in recent years that left it with some subpar leases.
The filing asserts that the retailer “turns over inventory quickly and with good margins,” but a liquidity crisis prevented the firm from securing inventory. A demand by vendors for cash exacerbated the liquidity issues and led to the bankruptcy filing.
“In spite of these problems, however, Luke’s Locker still produced $34 million in revenue during the last fiscal year,” the filing stated. “So the debtors have sought protection under chapter 11 in order to reorganize their financial affairs and reemerge from bankruptcy free of the burdens that led to their current predicament.”
In an affidavit after the filing, company president Matt Lucas, the son of the legendary founder Don Lucas, vowed to reestablish the Luke’s Locker franchise to support the North Texas running community under a smaller group of stores.
“Luke’s Locker is putting into action a plan to restore Luke’s to its former strengths and offer even higher levels of skilled service and superb merchandise to its customers,” said Lucas. “Luke’s is confident this is the best decision to position the company for future success.”
Photo courtesy Luke’s Locker
