Total Hockey filed for Chapter 11 bankruptcy petition in U.S. Bankruptcy Court in St. Louis. The 32-store chain, founded in 1999, is seeking a sale of the company.
The hockey and lacrosse retailer listed assets of $10 million to $50 million and liabilities of $50 million to $100 million. The filing was blamed on one of the warmest winters on record in 2015, the weakening Canadian dollar, the collapse of a key vendor and a difficult integration of the Players Bench Corp. acquisition last year.
According to court papers, Total Hockey has entered into an asset purchase agreement with TSG Enterprises LLC,, which has more than 40 specialty goods operating under the Pure Hokey and Hockey Giant names. The purchase price was set a $22.5 million. TSG will serve as the stalking horse bidder to set a floor to an upcoming bankruptcy auction.
Total Hockey CEO and owner Michael Benoit said in a statement, “The company has worked with TSG over the last several weeks to ensure the best outcome for all of its creditors, customers, employees, and suppliers. Total Hockey is asking for the court to approve a sale process that would culminate in an auction the last week of July.”
Total Hockey, based in Maryland Heights, MO, was founded in 1999 as a spinoff from a general sporting goods company, and expanded from the St. Louis area to Chicago, Minneapolis, Detroit, Philadelphia, Washington, D.C. and other key major NHL markets. The privately held chain expanded into lacrosse and apparel in 2012, opening several stores under the brand Total Lacrosse. Last year, it acquired Players Bench, a Denver-based hockey and lacrosse retailer with eight stores in Colorado, Ohio, Texas, Utah and Wisconsin, and $12 million in annual revenue.
Total Hockey also invested in its e-commerce business, which includes totalhockey.com. In 2015, 27 percent of Total Hockey’s $63 million in revenue came from online sales, according to court documents. In 2014, revenues were $60 million.
According to court documents, Total Hockey’s comparable store sales were positive every quarter until 2015. Warmer weather last winter hurt sales and the recent sale of a competitor, Easton Hockey, led to an excessive amount of inventory in the marketplace. A weakened Canadian dollar compared with the U.S. dollar last year prompted fewer Canadian hockey teams to travel to tournaments where Total Hockey has stores, which cut into sales. Comps declined more than 8 percent for the fourth quarter of 2015 and same-store sales for 2016 are off about 5 percent.
“The Chapter 11 filing was necessary as a result of a loss of liquidity over the past six to nine months,” said Benoit in a statement.
He added that the integration of Player’s Bench was “difficult.” Last year, Total Hockey secured $35 million in financing to fund the Players Bench acquisition, to refinance debt and fund store expansion. Outstanding principal and interest for those loans exceeded $16 million, and a forbearance agreement on one of the loans terminated July 5, making payment immediately due.
Total Hockey said in court papers that its board on June 6 hired Lee Diercks, a partner at turnaround firm Clear Thinking Group LLC, as its chief restructuring officer. Diercks said in court papers that in order to facilitate a turnaround, corporate staff had been reduced by 20, with a temporary reduction in management compensation. Marketing spending was also shifted way from television and print advertising toward digital while contracts with UPS and other vendors had been renegotiated.
In recent weeks, Total Hockey had been in talks with competitors and private equity firms about acquiring the chain but no deal was hatched. Total Hockey’s board voted for filing for bankruptcy on June 30.
Its largest unsecured vendor trader creditors are Bauer Hockey Inc., with an unsecured claim of $13.8 million, Reebok-CCM Hockey, $7.3 million; Warrior, $1.48 million; Easton, $1.28 million; Sherwood Hockey, $448,249; STX Lacrosse, $349,537; Vaughn Custom Sports, $295,625; True Temper Sports, $291,025; Maverik Lacrosse, $288,832; North American Tape, 286,994; Brine, Inc, $283,842; Nike USA, $269,906; Peony Apparel Inc, $211,924; Brians Custom Sports, Ltd, $193,184 and Shock Doctor, 180,918.
Michael and Katherine Benoit each own 50 percent of Total Hockey’s parent, Hipcheck LLC, according to court filings.