Modell’s Sporting Goods will shutter up to 20 stores and is considering the sale of a minority stake to help itself stay afloat, CEO Mitchell Modell told Fox Business. The company also is working with landlords to minimize the number of store closings, and reached a deal to preserve four on Feb. 22.
The closures, which could include up to five stores in in New Jersey, eight in New York and four in Pennsylvania, would help the company preserve the majority of its more than 140 locations. However, the retailer remains on a downward trajectory: Modell’s lost $50 million in 2019, which CEO Modell blamed on a short holiday season, increased competition from e-Commerce and “lousy” local sports teams.
The retailer also is facing pressure from vendors: Modell noted that the company currently has enough inventory but that future availability is tightening due to suppliers questioning the viability of the business. Modell hopes to earn the support of 90% of Modell’s vendors and landlords and invest capital from potential investors to fuel a turnaround effort.
“For the first time ever, I never thought I would sell equity, but I’m now willing to sell a minority stake in our company,” said Modell in a statement regarding his appearance on Fox Business. “But the fascinating part of the story is how I plan to do this. We are looking at this platform as crowdsourcing at the highest level. I’m hoping someone watching the show will say I love the brand and want to invest.”