 |
The winning bidder for assets of the bankrupt outdoor retailer Gander Mountain said it will likely close most of the stores.
Camping World Holdings Inc. (NYSE: CWH), which operates a large network of RV-centric retail locations, won the bankruptcy court-supervised auction for assets of Gander Mountain Co. and its boating retail outlet Overton’s Inc.
Simultaneously, a group of four restructuring firms was chosen as the winning bidder to conduct liquidation sales at substantially all of Gander Mountain’s existing stores.
The U.S. Bankruptcy Court for the District of Minnesota will consider approving the winning bids at a sale hearing scheduled for May 3, 2017.
In a statement, Brent Moody, chief operating officer of Camping World, said, “Camping World’s plan is to immediately right size the inventory and operate only in retail locations with occupancy costs that we believe support profitable operations, with an extreme focus on corporate overhead and expenses.”
Gander Mountain Co. filed for bankruptcy reorganization in March. At the time, it operated 166 outdoor equipment and sporting goods supercenters.
With its winning bid, Camping World will be purchasing Overton’s $15.6 million inventory, plus $22.15 million for certain other assets, including the right to designate any real estate leases for assignment to Camping World. The agreement also includes certain distribution center equipment and Gander Mountain and Overton’s ecommerce business.
Under the deal, Camping World said it will have the flexibility to make specific inventory selections and continue to operate only those stores which are profitable.
“While we are obligated to assume a minimum of 17 leases, our designation rights will allow us to operate stores and retain employees at a number to maximize profitability,” said Marcus Lemonis, chairman and CEO of Lincolnshire, IL-based Camping World.
Camping World plans to continue operating Overton’s business as a going concern. The retailer has stores in Raleigh, NC, and Greenville, SC. However, liquidators will immediately commence the sale of Gander Mountain inventory at Gander Mountain locations.
“The liquidation of the existing Gander Mountain inventory will allow us to start with a clean slate of what we consider the appropriate mix and level of inventory, including the addition of Camping World and Overton offerings where appropriate. And our lease designation rights will allow us to select only those stores in appropriate locations with appropriate cost structures,” Lemonis said.
