The long-speculated bankruptcy of Sports Authority is official.
In a statement posted to its website Wednesday, CEO Michael Foss said that the company decided to file for Chapter 11 bankruptcy as a way to implement a financial and operational restructuring that it sees as necessary to better appeal to customers.
Foss said the sporting goods retailer has identified 140 stores to close or sell in the coming months. "This was a tough decision to make, but we believe it was a necessary step in our plan to make Sports Authority an even better partner for our customers," he wrote.
Speculation of the filing heated up when Sports Authority missed a $20 million interest payment in January. That prompted a 30-day grace period during which it could compromise with creditors. That window ended February 14.
The 140 stores on chopping block are a sizable chunk of the 463 it operates overall.
The retailer filed for Chapter 11 protection in federal bankruptcy court in Delaware in a move aimed at helping it shed much of its debt and clean up its balance sheet. A successful revamp would let Sports Authority improve its brick-and-mortar, perhaps with in-store boutiques similar to the Under Armour and Nike shops that have been so fruitful for rival Dick's Sporting Goods.
Sports Authority, whose name adorns the stadium of the Denver Broncos, has been saddled with boatloads of debt ever since a $1.3 billion leveraged buyout a decade ago. At the time, the Colorado-based retailer and Dick's (dks) were similar in size with annual sales of $3 billion. But since then, Dick's has invested in its in-store experience and in-store tech, which have helped propel the retailer's sales past Sports Authority's. Analysts are forecasting total 2015 sales of $7.3 billion for the Pennsylvania-based company, compared to almost $3 billion at Sports Authority.
Sports Authority, now owned by Leonard Green & Partners, was also hurt by traditional retailers like Target (tgt) and Kohl's (kss) to Gap Inc.'s (gps) Athleta, and even Walmart (wmt), which all started selling more athletic wear. Its equipment sales have suffered at the hands of Amazon (amzn) and Walmart. With so many other sports gear retailers to choose from, Sports Authority customers stayed away in droves.
This story has been updated throughout.