Sportsman's Warehouse Chief Executive Officer Stu Utgaard is vowing to steer his company through bankruptcy proceedings despite a number of other bankruptcies that have headed to liquidation, including Joe's Sports & Outdoors. The comments were made while speaking to the Mail Tribune in Oregon.
“Since they changed the bankruptcy laws in October 2005, there has never been a retailer that didn't turn into a Chapter 7 – total liquidation to the walls,” Utgaard told the newspaper. “We hope to be the first.”
Utgaard based his belief on Sportsman's Warehouse's relatively strong cash position.
“We went into bankruptcy with lots of cash and have paid bank debt (to GE Capital) down a ton,” Utgaard said. “By the middle of the month we will have it down to $10 million, not much in the grand scheme of things. We have an $85 million debtor in possession (loan) facility and a $125 million exit revolving line of credit lined up. We took two aggressive actions – selling the stores to UFA and liquidating 23 to pay down bank debt. We're continuing to pay it down as fast as we can to save a couple thousand jobs.”
On a scale of 1 to 10, Utgaard rated Sportsman's Warehouse's chances of survival an 8.
Utgaard said the company also is seeking to terminate leases at many of the closed stores, a move that could erase hundreds of millions of debt.
Rather than looking for a buyer for the company, Utgaard is looking for a new partner.
“We are trying to find an equity investor and we've got several guys we're talking to,” he said.
Prior to filing its bankruptcy petition on March 21, Sportsman's Warehouse announced the sale of 15 stores to United Farmers of Alberta, a Calgary-based cooperative, and the liquidation of 23 others. It will have 29 stores after the sale and closings.
