EMS parent firm declaring Bankrupcy

[peakbagger]

https://www.wsj.com/articles/easter...es-files-for-chapter-11-bankruptcy-1486383599

This doesn't bode well

 

[jniehof]

Again? Last time was less than a year ago. Doing the digging, it's a different owner, who acquired them through the last owner's chapter 11.

At this point EMS seems to have about as much in common with its original self as Atari.

 

[peakbagger]

Just a brand name without a home. Retail is dying and I expect regional brands like these will eventually completely disappear

 

[Christa]

Again? Last time was less than a year ago. Doing the digging, it's a different owner, who acquired them through the last owner's chapter 11.
.

Actually, it's not. Here's what the corporate structure looked like:

Pre-2016 Bankruptcy
Versa Capital Management
- Vestis Retail Group (CEO: Mark Walsh)
- Bob's Stores
- Eastern Mountain Sports
- Sports Chalet

Post-2016 Bankruptcy
Versa Capital Management
- Eastern Outfitters (CEO: Mark Walsh)
- Bob's Stores
- Eastern Mountain Sports


Basically, it was some accounting mumbo jumbo where Vestis declared bankruptcy, closed Sports Chalet in it's entirety along with a few Bob's and EMS stores and then reformed as Eastern Outfitters with the remaining Bob's and EMS stores. Vestis and Eastern Outfitters even had the same CEO. Ultimately, it was still Versa Capital Management who owned them both pre-2016 bankruptcy and post-2016 bankruptcy.

I suspect this time around may be slightly different though. A european sports company (Sports Direct) is in talks to or has already put in a stalking horse bid. Who knows what will come out of that or if or what any of the EMS and/or Bob's stores will survive. As near as I can tell, they're all still open for now.

 

[Mike P.]

It's a shame for an outdoor retailer most of us are familiar with. It's more of a case of financial mumbo jumbo including pre-packaged bankruptcies and Leveraged Buy-outs. Once upon a time, Berkshire Hathaway was a bankrupt Textile firm before Warren Buffet bought the company.

Eddie Lampert tried to do the same thing with Sear's & Kmart and instead is on the verge of running iconic Sears into oblivion. Looks like EMO & Bob's are on the way also. Likely the higher minimum wage isn't helping. Could they run EMS out of space in Bobs & lessen their property leases? Could sneaker fitting & boot fitting be that different? (need less toe space in a running shoe unless doing a lot of hills) runners need synthetic materials, same as hikers and bikers.

As long as I can get boots from EMS, LL, Dicks or Cabela's, I'll find something for summer day hiking. The heavy boots and plastics are holding up fine & have not worn them much the last couple of years.

 

[Remix]

https://www.wsj.com/articles/easter...es-files-for-chapter-11-bankruptcy-1486383599

This doesn't bode well

Bankruptcy does not necessarily mean that it's the end of the chain. The firm gets to walk away from debt and leases purchase commitments, contracts, and or renegotiate anything through the court. If it loses a lot of debt, it may become attractive again to investors.

Ironically, if EMS paid any creditor in the last 90 days, the Bankruptcy court can claw that money back to equalize the pain on all creditors.

Are people buying less outdoor gear.? .. Maybe someone could look at year over year sales at Rei. They publish all financial statements. A year ago, I posted a WSJ article that quoted market research which indicated that people were hiking for shorter times but more intensely.

 

[skiguy]

Are people buying less outdoor gear.? .. Maybe someone could look at year over year sales at Rei. They publish all financial statements. A year ago, I posted a WSJ article that quoted market research which indicated that people were hiking for shorter times but more intensely.

No hard evidence to support it but IMO the Outdoor Retail landscape has changed dramatically in the last 20-25 years. I have worked for local outdoor shops partime since the early 80's and the one thing I can tell you is that the consumer has changed. Obviously brick and mortar stores have taken a big hit due to online stores. Coupled with that there are many more choices of retailers. Most customers do not have the allegiance to one brand store like they use to because of that. Many more choices.

 

[Christa]

And one more piece of the outdoor retailer landscape changed last week....Walmart bought Moosejaw.

http://fortune.com/2017/02/15/walmart-moosejaw/

 

[Spiny Norman]

It also seems like Sierra Trading Post is getting out of the gear business since TJX (TJ Maxx) bought them.

At least out of ski, snowboards, and snowshoes anyways. Shoes and apparel must be wear the money is.

 

[Kimball]

Just a brand name without a home. Retail is dying and I expect regional brands like these will eventually completely disappear

REI seems to be doing well and expanding. EMS just makes poor management decisions and the has lost it's way. It's no surprise their sales are down seeing the way they treat customers and affiliates. I dumped all of EMS's ads off TrailsNH years ago when they started acting like A-holes.

 

[Christa]

And, hey, in case anyone really cares, they've entered into an agreement with a UK firm, Sports Direct Ltd to purchase them in some form. Looking at the latest in the court documents, it appears that Sports Direct only wants to take on about half the stores. They went into bankruptcy with a total of 86 stores between them (51 EMS and 35 Bobs). The current proposal is to close 27 EMS and 21 Bob's locations. This is still awaiting court approval, so it could change..

https://sgbonline.com/eastern-outfitters-to-close-48-stores/

 

[Amicus]

Cambridge MA is gone already, alas. It was the only store with hiking stuff that I could walk to.

 

[jniehof]

Cambridge MA is gone already, alas. It was the only store with hiking stuff that I could walk to.

That was actually not a bad store in terms of selection. The layout was terrible and it was oddly hard to find, though.

They only list "Boston" as closing; I presume it's Comm Ave and the Back Bay location was already closed? Given how close the REI is (to both), not really surprising. Salem and Nashua are the only NH closings so I guess that's pulling out of the mall market.

 

[bikehikeskifish]

Salem and Nashua are the only NH closings so I guess that's pulling out of the mall market.

And yet, Manchester (Mall of New Hampshire) stays, even with REI opening in Bedford (Can't wait... REI in my town ) They are closing all the stores in VT.


Tim

 

[sardog1]

And yet, Manchester (Mall of New Hampshire) stays, even with REI opening in Bedford (Can't wait... REI in my town ) They are closing all the stores in VT.


Tim

The more things change, the more they stay the same. One of the early battles between these two was fought in Roseville, MN (suburb of St. Paul.) EMS had acquired a local independent store with a good rep in the early 70s. They didn't goof it up too much while they owned it (been there, worked there at the time). Then REI opened its first store east of Seattle ... six blocks away. EMS was dust within a year or so; even an iconic log building housing the store got razed eventually.

 

[Christa]

They only list "Boston" as closing; I presume it's Comm Ave and the Back Bay location was already closed.... Salem and Nashua are the only NH closings so I guess that's pulling out of the mall market.

Yes, Boston is the Comm Ave store. The one on Boylston closed a few years ago (2014ish) and Harvard Square/Cambridge closed last year.

Nashua actually was no longer in the mall - they had moved across the street to the former Borders location a few years back, so it's not really pulling out of the malls per se (although, they've trended that way for years now, at least getting out of many true malls and into more of a strip mall with direct access from tge store to ge parking lot instead). As Tim mentioned, the Manchester, NH store still appears to be safe and that is in a mall. Other stores in other states that remain are also in malls. There was some other factors in play, likely sales and rents being the top two.

 

[Quietman]

Wow, how did I miss this? I live 4 miles from the Peterborough (former) headquarters store and I hadn't heard about this. So sad to see another outdoors retailer about to go under. Most of my gear has an EMS label on it, and I will really be sad if this comes to pass.

 

[Nessmuk]

I joined REI way back in 1970. At the time their catalog was fantastic, full of tips and general outdoor and camping information, as well as info about the company financials and board members. I would keep copies of the catalogs just to have. But that format did not last. EMS was a prime competitor. I ordered some of my first gear from both companies. But REI had the edge with its annual dividend. Then some years later EMS decided a better business model would be to eliminate sales by catalog. So I stopped ordering from EMS, ( the internet did not yet exist) My brother lived a few miles from Peterborough and I stil enjoyed visiting the HQ store many times. Eventually EMS saw its error and again began again publishing and sending out a catalog to oder from. But the damage was done, original loyal customers were gone and not even internet sales worked for them.

Sorry to see so many stores closing. Two in Syracuse (I never understood why two there). The store in the huge Destiny Mall was just awful. Hardly any hard core outdoor gear, more fluff and the like geared to mall goers. But the other Syracuse store, a short few miles away from Destiny, is just outside a smaller strip mall, in its own building, was the place to shop if you wanted he real stuff.