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Bankruptcy May Be Your Option

Chapter 11 filing will give Sports Authority greater flexibility

With the advent and the relatively recent popularity of the Internet, many companies across the country have changed the way they do business. In order to remain successful, businesses in Oklahoma have had to place energy and money into bulking up their ability to engage in e-commerce as well as make upgrades to their store to encourage foot traffic. One company with stores in 41 states has recently made the decision to file for Chapter 11 bankruptcy in order to keep up with other companies in the same industry.

The company, Sports Authority, reportedly took on a great deal of debt when the equity firm Leonard Green and Partners acquired it in 2006. A professional with a market-research company claims that this debt is likely a major factor in the recent filing. The company was not able to manage that debt or able to cope with the additional overhead.

By filing for bankruptcy, representatives hope that they will be able to upgrade the company's stores in order to compete with similar companies who have added rock climbing walls and putting greens in order to increase foot traffic. Additionally, the company hopes to invest in its e-commerce system. As part its plans to increase overall success, Sports Authority announced that 140 of its 463 stores and two distribution centers will close.

A Chapter 11 bankruptcy filing can help businesses deal with unmanageable debt. In this case, Sports Authority may be poised to make important investments that could further the future success of the company because of such a filing. There are those in Oklahoma who may also benefit from similar action, creating a clean financial slate in order to build future success.

Source: seattletimes.com, "Sports Authority, falling behind in stores and e-commerce, files for bankruptcy", Samantha Masunaga, March 2, 2016

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