Sportsman's Warehouse will shutter 23 of its stores nationwide -- including all three of its Minnesota outlets -- as the Midvale, Utah-based retailer struggles to reduce debt.
Stores in Woodbury, Coon Rapids and St. Cloud will close in the next 60 days after completing liquidation sales, according to Stu Utgaard, chairman. About 200 employees in Minnesota will lose their jobs out of about 2,000 job cuts companywide, he said.
In addition to closing stores, Sportsman's also plans to sell 15 outlets, including one in Fargo, to UFA Co-operative Ltd. of Calgary, Alberta. The Canadian co-op previously planned to buy a majority interest in Sportsman's, providing the retailer with a cash infusion of about $100 million to pay down some of its bank debt, Utgaard said.
But the deal fell apart, largely because of the sharp downturn in the U.S. economy. Utgaard said the store closures and sales should help Sportsman's cut its bank debt from about $270 million to about $120 million.
Sportsman's most recently has had annual revenue of about $750 million, based on 67 stores. The privately held company has not posted an after-tax profit in the past couple of years, but Utgaard said two of the three Minnesota stores were profitable. He declined to say which ones but said the St. Cloud store was not affected by the opening of a huge Cabela's store in nearby Rogers a few years ago nor was the Woodbury story affected by competing against a Gander Mountain store there.
"In a normal market we all would be able to exist," Utgaard said. "But this isn't a normal market."
Sporting goods retailers are among those that have suffered from the economic meltdown that has consumers cutting back on discretionary spending. Last week Joe's Sports & Outdoor, a 30-store chain based in Oregon, filed Chapter 11 bankruptcy.
After months of paring inventory and cutting overhead, St. Paul-based Gander Mountain expects fourth-quarter profit of $20 million, more than triple its performance a year ago. Preliminary results show that same-store sales, a key measure of a retailer's financial health, were down 0.2 percent.
Cabela's Inc. last month reported a 2.2 percent increase in comparable-store sales for its fourth quarter. Despite the general downturn in retail sales, both Cabela's and Gander Mountain have reported strong sales of firearms. Gun stores nationwide have reported a surge in sales of handguns, rifles and ammunition since the election of Barack Obama, based on some consumers' concerns that the new administration will curtail their right to bear arms.
Susan Feyder • 612-673-1723