A week after Sports Authority told employees it would close all of its Texas locations, the sporting goods retailer appears to be on the brink of filing for bankruptcy protection and closing nearly half of its stores.
Reuters, citing sources close to the matter, reports that Sports Authority intends to file for Chapter 11 bankruptcy as soon as next month and close up to 200 of its 450 locations.
The move was initiated after the company missed a $20 million coupon payment on Jan. 15, which triggered a 30-day period, ending Feb. 14, to work out a compromise with its creditors.
Sources tell Reuters the company was unable to come up with a plan, leading it to make the decision to move toward bankruptcy.
The plan, the sources say, is for the company to expedite closing some of its 450 stores across the U.S. and then eventually re-emerge through the bankruptcy process.
Reuters reports that before Sports Authority can file for bankruptcy it must line up creditors to get it through the process, and find liquidators for the stores it plans to close.
Earlier this month, Bloomberg reported that Sports Authority was taking steps toward bankruptcy in the face of a looming debt payment.
The retailer, which has an estimated $643 million in debt, was reportedly in talks with lenders on a deal to reorganize its operations in Chapter 11 bankruptcy proceedings.