Gander Mountain filed Friday for Chapter 11 bankruptcy protection from its creditors with the aim of selling the business. The company, which is seeking a buyer, said it will be closing 32 of its 162 stores in the next few weeks.
Reports began circulating in January that the St. Paul-based company was suffering financially, with some vendors not being paid. In a written statement, Gander Mountain said the filing was prompted by a realization that the company lacks the capacity to reposition its faltering outlets and that the best way forward is to sell the business “on a going-concern basis.”
“The court’s protections will enable us to manage the sale process on an expedited basis while protecting the interests of our customers, employees and other stakeholders,” Gander Mountain said.
Gander Mountain said it is in active discussions with several potential buyers and expects to hold an auction in late April, with an anticipated closing by May 15.
As part of its bankruptcy restructuring, Gander Mountain said it will close 32 stores. A list by state:
Alabama: Gadsden, Mobile, Montgomery, Tuscaloosa
Georgia: Augusta, McDonough, Snellville
Illinois: Champaign, Algonquin, Springfield
Indiana: Merrillville, Greenfield
Minnesota: Rogers, Mankato, Woodbury
New York: New Hartford
North Carolina: Raleigh, South Charlotte
Texas: Houston, Killeen, Laredo, Lubbock, Round Rock, San Antonio, Sugar Land, Texarkana, Waco, West Houston
West Virginia: Charleston
Wisconsin: Eau Claire, Germantown
Gander also filed for bankruptcy Friday for Overton’s Inc., a wholly owned subsidiary in North Carolina that sells boating gear and outdoor equipment through the Internet and catalog sales. Gander tried selling Overton’s last year to help the company address its financial problems, but no buyer was found.
The privately held company is controlled by David Pratt, a businessman and outdoors enthusiast from St. Louis, and the Erickson family, which also owns Holiday Station stores. According to the bankruptcy filing, Pratt’s Gratco LLC owns 44.6 percent of the stock, with the Erickson family’s Holiday Cos. owning 44.8 percent. The remaining shares are owned by another Holiday company and two other members of Pratt’s family.
Gander Mountain does not disclose financial data, but Dun & Bradstreet estimates the company’s annual sales at slightly more than $1 billion, with 5,605 employees nationwide.
In its bankruptcy filing, Gander Mountain listed liabilities of more than $500 million. Its list of unpaid vendors features some of the biggest gun makers in the U.S., including Sig Sauer, Remington and Smith & Wesson. The largest unsecured creditor is Vista Outdoor Sales, a California footwear and sporting goods manufacturer that is owed more than $15 million.
Gander Mountain has a $30 million loan and revolving credit lines totaling $525 million, but it was not clear how much of the credit line is being used. Houlihan Lokey Capital, a Minneapolis firm specializing in mergers and acquisitions, has been hired to advise the company, and Lighthouse Management Group will oversee the restructuring.