Iconic sporting goods store surprises staff with announcement of 2 additional stores saved from closure

Modell’s CEO to staff: We aren’t closing guys

Modell’s CEO Mitch Modell discusses his ability to save stores from closure after receiving widespread support from the public, saving 48 jobs.

Mitch Modell, the CEO of iconic sporting goods store Modell’s, surprised staff members Thursday after announcing two additional stores would be saved from closure.

Continue Reading Below

Modell ripped a sign off a wall and declared “we are not closing guys we are going to stay open.”

The two additional stores were saved after receiving support from the public, bringing the number of avoiding closures to seven and saving a total of 129 jobs.

On Monday, Modell told FOX Business’ Stuart Varney that after an outpouring of support, he had been able to rescue five of the 24 stores on the chopping block from closure, saving 81 jobs. Of the five spared stores, three were in Pennsylvania, one in Virginia and one in New York.

SPORTING GOODS RETAILER MODELL’S SAVES 5 STORES FROM CLOSURE AMID FINANCIAL TURMOIL

Of the 24 stores first slated to close, five are located in New Jersey, eight in New York, four in Pennsylvania, and the balance are in either New England or the Washington D.C. area.

The stores were saved by Modell’s renegotiation with landlords who, if the company went bankrupt, would lose two year's worth of rent.

Stephanie Vargas looks at Nike footwear at a Modell’s store in New York, U.S. (Photographer: Timothy Fadek/Bloomberg via Getty Images)

Modell had initially told FOX Business’ Maria Bartiromo that the sports retailer would be forced to close 24 locations and could sell a minority stake in the company due to financial difficulty.

SPORTING GOODS RETAILER MODELL’S TO CLOSE 24 STORES: CEO

In March of 2019, the company’s financial turmoil began when the Wall Street Journal reported the retailer had brought in Berkeley Research Group as a financial adviser to explore steps including filing for bankruptcy. The report led to vendors refraining from shipping products to Modell’s, insurance companies cutting off the company and its credit rating being downgraded, according to Modell.

At the time of the Wall Street Journal’s article, Berkeley was hired as a consultant to help the company with merchandising operations, according to Modell, not for corporate restructuring.

The company lost $50 million in sales in 2019 as a result of a warm winter, “lousy” local sports teams, six fewer days between Thanksgiving and Christmas, the rise of internet retail and the Wall Street Journal piece.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Modell told FOX Business that if the company can get 90 percent support from its landlords and vendors, combined with selling a minority stake, it would have a path to success.

Modell’s was founded by Mitch Modell’s great-grandfather Morris A. Modell in 1889. The company has been family-owned ever since and, prior to the announced closures, operated 141 stores.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article