City Sports, the Boston athletic retailer that filed for bankruptcy in October, plans to hold going-out-of-business sales after failing to find a buyer willing to keep its 26 stores open.
Eve Bould, spokeswoman for City Sports Inc., said the sales would begin Friday. City Sports has locations from Vermont to Virginia, including nine in Massachusetts. Previously, the company said it planned to shutter eight stores and sell the other 18 to a company that would continue to operate the sporting goods chain.
Instead, the company’s assets will be sold to Hilco Merchant Resources LLC, a unit of Hilco Global of Northbrook, Ill., and Gordon Brothers Retail Partners LLC of Boston, which won an auction overseen by a bankruptcy court in Delaware. The purchase price wasn’t disclosed and the sale is set to be finalized Thursday.
Hilco and Gordon Brothers are known for buying troubled companies and selling off assets through going-out-of-business sales. Officials at the companies could not immediately be reached for comment.
City Sports was founded by high school friends Mike Kennedy and Eric Martin in 1983 with a location on Massachusetts Avenue. It laid out an ambitious plan for growth when it was acquired by the Highland Consumer Fund in 2008. The late Thomas Stemberg, who founded the Framingham office supply chain Staples Inc. and was a managing general partner at Highland, said at the time that he thought City Sports could eventually grow to include 300 locations.
Pete Cornetta, a managing general partner at Highland, didn’t reply to a request for comment.
The company fell on hard times last winter, according to a declaration filed by Andrew Almquist, chief financial officer of City Sports. The company faced an “extremely competitive market” for name-brand athletic apparel from brands such as Nike and Under Armour, he said, and severe weather last winter put a damper on sales. Despite efforts to cut costs, he said, City Sports couldn’t avoid bankruptcy.
Ani Collum, a partner at Retail Concepts, a consulting and marketing firm in Norwell, said City Sports struggled to associate its name with expertise in a single area. Unlike REI, the outdoors company whose initials stand for Recreational Equipment Inc., or Lululemon Athletica Inc., whose products are marketed to yoga enthusiasts, Collum said City Sports offered a wide assortment of athletic equipment and clothing.
“They weren’t a brand themselves,” Collum said. “They were just selling lots of other people’s brands.”
The closing also highlights the plight faced by brick-and-mortar retailers, which face higher costs and taxes than online stores, according to Jon Hurst, president of the Retailers Association of Massachusetts, a trade group. He said customers often test out a product and learn about it in stores, but decide to use their phone to buy it from a cheaper online seller.
“There’s real implications for our main streets, real implications for our jobs,” Hurst said.
Correction: An earlier version of this article omitted that the sale of City Sports requires final bankruptcy court approval.