Eastern Mountain Sports could get a reprieve from the retail graveyard despite a history of three bankruptcy filings.
Most of the time, the third go-around in Chapter 11, the so-called Chapter 33, signals the death knell for retailers. That’s the case of EMS sibling Bob’s Stores, which is liquidating all units. Both banners are owned by GoDigitalMedia Group. The operating entity is Mountain Sports LLC, which filed its Chapter 11 petition in a Delaware bankruptcy court June 18.
U.K.-based outdoor and sports gear retailer Mountain Warehouse Ltd. offered at least $5 million to acquire the EMS intellectual property and other assets. It also agreed to pay a percentage of the value for certain inventory in seven store locations, which could bump up the acquisition to $8 million, according to a bankruptcy court document.
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But even if the British retailer — which has been named the stalking horse bidder — is successful in its bid, not all seven stores will necessarily remain open. The court document noted that leases for three core EMS stores are month-to-month, meaning that those leases can’t be assigned and Mountain Warehouse will need to negotiate directly with landlords for new lease agreements.
The purchase agreement listed the seven core store locations: Hadley, Mass.; Burlington, Vt.; Lake Placid, N.Y.; West Lebanon, N.H.; Saratoga Springs, N.Y.; Portsmouth, N.H., and N. Conway, N.H. The list did not specify which stores are currently operating under month-to-month lease terms. At the time of the bankruptcy filing, there were about two dozen EMS doors in operation.
Bidding procedures to allow for better offers are in place. Should the U.K. retailer get outbid at auction, it will be entitled to a break-up fee of $150,000 and reimbursement of its out-of-pocket expenses for up to $25,000. The auction process is expected to conclude on Aug. 30.
EMS was acquired in 2012 by Versa Capital Management, which placed the operation in its Vestis Retail Group. Vestis already was operating the Bob’s Stores and Sport Chalet banners. Vestis filed its Chapter 11 petition in 2016. Sport Chalet stores shuttered during the bankruptcy, while Vestis re-acquired Bob’s and EMS under a new entity called Eastern Outfitters.
A year later, Eastern Outfitters filed the second Chapter 11 petition for bankruptcy court protection. Mike Fraser’s Sports Direct International Plc acquired the Bob’s and EMS nameplates, but later sold them to GoDigitalMedia Group in 2022.
EMS caters to the sports adventurer seeking reliable and functional outerwear and gear at value prices.