Eastern Mountain Sports and Bob's Stores are headed back to bankruptcy protection for the second time in less than a year. Eastern Outfitters, its Versa Capital Management-owned parent, filed for Chapter 11 in Delaware on Sunday.
Sports Direct, the United Kingdom's largest sporting goods retailer, is the anticipated stalking-horse bidder in a forthcoming auction, court papers show.
Vestis Retail Group, the retailers' old Versa-backed parent, filed for Chapter 11 in April. Versa bought the two store lines in July for $1.5 million in cash and a $35-million credit bid against a third-lien loan had it extended to the holding company. The distressed investment private equity firm also pledged to pay back about $113.44 million owed to Wells Fargo as part of the deal. Versa has controlled Bob's Stores since 2008 and Eastern Mountain Sports since 2012.
Versa did not immediately respond to a request for comment. Eastern Outfitters' bankruptcy is the second Chapter 11 filing for one of its portfolio companies in a week: clothing retailer The Wet Seal began insolvency proceedings on Thursday and is closing all of its stores.
A source familiar with the matter said that several Eastern Mountain Sports locations had missed monthly payments due to their landlords. The source requested anonymity because they were not authorized to speak publicly about the situation.
Sporting goods and clothing retailers are both facing particularly challenging retail environments. Versa/Vestis holding Sports Chalet and Sports Authority both underwent full-chain liquidation in 2016, while Aeropostale, Pacific Sunwear of California and Limited Stores have all closed stores and slashed debt.
Eastern Outfitters listed assets and liabilities between $100 million and $500 million in its petition.