Modell’s prepping for bankruptcy filing
Modell’s is preparing to file for bankruptcy as soon as Sunday, The Post has learned.
The 131-year-old, athletic-gear retailer has stopped shopping for a white-knight investor as it scrambles to renegotiate its 140 leases across the New York metro area, and is likewise giving up on renegotiating terms with its vendors, company CEO Mitch Modell confirmed on Friday.
In an interview last month, Modell had blamed his company’s woes on “lousy” local sports teams that have depressed jersey sales, as well as a shorter holiday selling season and the warm winter, which affected jacket, boot and glove sales.
On Friday, Modell said he had tried to get extended terms from his vendors and better leases as sales have steadily fallen amid increased competition with Amazon and a slew of big-box retailers, but when they balked, bankruptcy became the only viable option.
“We have been totally transparent that if we get 90 percent support collectively from our vendors and landlords that we would have a successful path moving forward,” Modell told The Post.
Many of the landlords, however, wanted to recapture their spaces if they were able to find a new tenant, Modell said.
“That was a dealbreaker and our vendors didn’t want to expose themselves any more than they were,” he said.
As talks with landlords and vendors have hit a wall, Modell’s is instead hoping that Denver-based JackRabbit — a sportswear retailer that bought Olympia sports brand last year — will buy it out of Chapter 11, a source with knowledge of the situation told The Post.
Modell confirmed that the earliest the company will file for bankruptcy will be on Sunday. He declined to confirm whether the company is in discussions with JackRabbit.
“A lot of companies are taking a look at us,” he said.
Wells Fargo and JPMorgan Chase who are Modell’s biggest lenders with about $50 million in outstanding debt, will likely provide the debtor in possession financing.
He recently sold the company’s Bronx warehouse to raise extra cash.
JackRabbit, which is owned by CriticalPoint Capital, announced a deal to buy Olympia Sports of Maine in October. The company operates 135 stores across the country.
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