West Marine Inc. filed for bankruptcy protection on Sunday, attributing the move to declining sales as consumers reduce spending on outdoor recreation amid inflation and several years of severe weather.
The 58-year-old retailer said it has an arrangement with key creditors that allows for a court-supervised sale process. If no buyer is identified while under protection, control would be transferred to lenders to whom the company owes $251 million, according to court filings.
In a court filing, Chief Executive Officer Paulee Day noted that customers have altered their spending priorities and habits as a result of persistent effects from the post-COVID-19 economy, and that those shifts have contributed to lower sales for the company.
West Marine is one of several outdoor-recreation firms that have sought bankruptcy protection in the wake of a post-pandemic pullback in consumer spending. The court documents reference similar recent filings by other companies in the sector, including an apparel chain that filed earlier in the year and two recreational vehicle and equipment companies that also sought creditor relief.
Under the terms of its restructuring agreement with senior lenders, West Marine plans to shutter underperforming locations. The company told the court it intends to request approval of a debt-reduction plan within 80 days of its filing.
West Marine operates about 200 stores across 34 states and Puerto Rico and employs roughly 2,600 workers. The company reported owing creditors at least $549 million and said it spends more than $50 million each year on rent for its physical stores.
To support the bankruptcy process, West Marine plans to use $21.5 million in cash to fund its case. The court filings outline the liquidity available and the steps the company will take while in protection, including pursuing either a sale or a lender-led recapitalization if a buyer is not found.
The filing frames the restructuring as a time-limited effort to reduce debt and reconfigure the business footprint. The combination of consumer spending shifts, rent obligations and substantial creditor claims are central to the companys case for protection under bankruptcy rules.
Key context and next steps:
- West Marine will seek court approval of a debt-reduction plan within 80 days.
- If no buyer emerges during the court-supervised process, control is slated to pass to lenders owed $251 million.
- The company plans to close underperforming stores as part of its restructuring with senior lenders.