Sportsman's Warehouse Inc. said it plans to emerge from bankruptcy by August 15 and will continue to operate 26 stores in 14 states.  The reorganized company will be led by new CEO John Schaefer. Schaefer, who was formerly CEO of Team Express, also served as CEO of multi-channel retailer Cornerstone Brands and COO and CFO of Eastbay. 


Stuart Utgaard, Sportsman’s Warehouse chairman and CEO, will be leaving the Utah-based hunt & fish retailer, but he did fulfill his prediction that the outdoor chain would be the first retailer to avoid liquidation since Congress overhauled bankruptcy laws in August 2005. Utgaard and his family acquired a one-unit location called Sports Warehouse in November 1996 and grew the chain to 76 locations at its peak.


Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware approved the company's reorganization plan on July 30. The plan was sponsored by an affiliate of Seidler Equity Partners, a private equity firm based in Southern California. Seidler, which had owned the preferred equity in SWH prior to the bankruptcy, will own 100% of the new equity in the retailer. Under the plan, unsecured creditors are expected to see a recovery of just 15% of their claims in cash.  Unsecured creditors were owed $130 million at the time of the bankruptcy filing (see SEW_0912 or BOSS_0912).


The retailer will emerge with a much smaller base of stores. Prior to the bankruptcy filing on March 21, Sportsman's Warehouse sold 15 stores to the United Farmers of Alberta Co-operative based in Calgary, Canada.  Those stores, which were part of a deal reached last November for UFA to acquire a majority interest in Sportsman's Warehouse, have since been renamed Wholesale Sports. A total of 26 stores were also closed during bankruptcy proceedings. Sportsman's Warehouse also closed six stores in 2008.


According to bankruptcy court document obtained by Sports Executive Weekly, the reorganized company's ongoing management team will also include Kevin Talbot, SWH’s current CFO; Larry Knight, VP of hardgoods; Stu Utgaard's son Chris Utgaard, currently the COO; and Mike Van Orden, currently chief technology officer.    


Other officers staying on are Steve Coffey, Jeremy Sage and Matt French. Sportsman's Warehouse's board will consist of three partners from Seidler Equity – Robert Seidler, Chris Eastland, and Leonard Lee – as well as the new CEO, Schaefer.


In a statement, Kevin Talbot, the company's CFO, said, “We are excited to continue serving our loyal customer base and are grateful for the strong support of our vendor partners throughout the bankruptcy process. This support made our reorganization possible.”


Larry Knight, the company’s VP of hardgoods, added “We remain committed to providing the product selection, shopping convenience and superior service that our customers and vendors have come to expect.”


Added Robert Seidler of Seidler Equity Partners, “Successfully exiting bankruptcy is a tremendous accomplishment – Sportsman’s is one of the few national retailers to do so in recent memory. We are confident that Sportsman's will remain America's Premier Outfitter under the direction of its experienced management team.”


The company had blamed its bankruptcy on over-expansion (particularly in 2006 and 2007 when it opened 21 stores) coupled with the financial crisis and economic downturn. In the year ended December 2008, it generated an operating loss of $24.8 million on revenues of $741.5 million. Its bankruptcy filing listed assets of $436.4 million and liabilities of $452.1 million.