Gander Mountain, Subsidiaries File for Chapter 11 Reorganization

Company seeks “going-concern” sale to complete restructuring. Operations remain ongoing during process; employee pay, benefits protected.

Gander Mountain For Sale
Gander Mountain, Subsidiaries File for Chapter 11 Reorganization
Gander Mountain
Gander Mountain

St. Paul, Minn. –-(Ammoland.com)- Gander Mountain Company announced today that, to maximize the opportunity to achieve a “going-concern” sale of its business, it and certain of its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.

Today’s action is the result of an in-depth review of the company’s strategic options undertaken in recent months to preserve the value of the company and position it for long-term success. Like many retailers, Gander Mountain experienced challenging traffic patterns and shifts in consumer demand resulting from increased direct-to-customer sales by key vendors and accelerated growth of e-commerce.

Despite aggressive actions to improve the efficiency of the company’s retail operations and support functions, the underlying financial impact from underperforming stores and unproductive, excess inventory hampered efforts to create a sustainable path forward.

The company’s strategic review yielded the following conclusions:

  • A narrowly focused and lower cost operating model is necessary to position the company for profitable growth.
  • The company does not have the financial capacity or time to reset its operations to fully implement the new model and, as a result.
  • The best available path forward is to sell the company on a going-concern basis.

The court’s protections will enable us to manage the sale process on an expedited basis while protecting the interests of our customers, employees and other stakeholders. Gander Mountain is in active discussions with a number of parties interested in a going-concern sale and expects to solicit bids prior to an auction to be held in late April 2017. The company expects to submit the winning bid to the Court for approval in early May and anticipates a closing of the sale by May 15.

The company generally expects to conduct normal business operations during the pendency of its restructuring. Employee pay will continue to arrive on time and in full, employee benefits will remain in place, retirement accounts are intact and protected. As a product of the company’s strategic review, 32 underperforming retail locations will begin a shutdown process in the next several weeks.

The company has obtained a committed debtor-in-possession (“DIP”) financing facility underwritten by Wells Fargo. Subject to court approval, this DIP financing, combined with cash from operations, is expected to provide sufficient liquidity to support the company’s continuing business operations and to minimize any disruption during the reorganization process.

The petitions were filed in the U.S. Bankruptcy Court for the District of Minnesota, case numbers 17-30673 and 17-30675. More information about Gander Mountain’s restructuring is available online at www.donlinrecano.com/gmc. Court filings and claims information are available at the U.S. Bankruptcy Court website, http://www.mnb.uscourts.gov/.

Gander Mountain’s advisors in the restructuring are Houlihan Lokey Capital Inc. serving as financial advisor and investment banker, Lighthouse Management Group serving as Chief Restructuring Officer, and Fredrikson & Byron, PA serving as legal advisors.

About Gander Mountain

Gander Mountain is the nation’s largest outdoor retail network with stores across 26 states. We are a fully integrated Omni-Channel retailer dedicated to servicing the hunting, camping, fishing, shooting sports, and outdoor products markets. As ‘America’s Firearms Supercenter,’ we are a market leader in the shooting sports category with an extensive offering of firearms, ammunition, and accessories. For the nearest store location call 800-282-5993 or visit www.GanderMountain.com.

Gander Mountain is also the parent company of Overton’s (www.overtons.com), a leading catalog- and Internet-based retailer of products for boating and other water sports enthusiasts.

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    RockMicktJim in ConroeHMLA-167 WarriorJim Recent comment authors
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    Rock
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    Rock

    You have to ask yourself… How long will it be until Cabela’s, Bass Pro Shops, Dicks and the other HUGE NAME shops all follow suit ? Their firearms and most other products are all on the high to very high priced realm. I guess they gotta pay somehow for the billion dollar SHOW STORE, they are like a spider web… Made to draw in and catch the wallets and credit cards of unsuspecting “bugs”…..

    Mickt
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    Mickt

    Gander Mountain just opened a location near me in Pa. and I thought, great, another place to shop. Walked through the typical retail setup to the back where the firearms are and choked on the pricing. Wasn’t there very long, looked at other gear and clothes and decided I wouldn’t be back. Doesn’t surprise me in the least they need a restructuring. I would think from a revenue point of view that the Overton operation is probably doing better than GM’s retail op’s. Saves to buy direct!

    Jim in Conroe
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    Jim in Conroe

    I shop at Gander Mountain due to its proximity – about 10 miles away. They are the closest place for powder to reload, and if you catch a sale, they are good for hunting clothes. If I drive another 50 miles I have my choice of two Bass Pro Shops, two Orvis Stores, and Dicks Sporting Goods, and if I add 10 onto that, a Cabellas. Academy Sports and Outdoors Stores are everywhere. It’s a tough neighborhood to be a big box outdoor retailer.

    Don
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    Don

    “Like many retailers, Gander Mountain experienced challenging traffic patterns and shifts in consumer demand resulting from increased direct-to-customer sales by key vendors and accelerated growth of e-commerce.” More likely, Gander Mountain’s high prices are driving customers to other retailers. We have a Bass Pro Shop within 10 miles, and a Cabela’s within 50 miles. Both of their parking lots are packed during the hours they are open. Gander Mountain’s is always empty. Both Bass Pro and Cabela’s have consistently significantly lower prices (as does Academy Sports and most other big box sporting goods stores). Gander Mountain’s business leadership is responsible… Read more »

    SK
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    SK

    Maybe if their prices weren’t so high people would shop there. Almost every time I go in there I leave empty handed. Ridiculous prices. They will probably close down the store in my area. They have a big banner out front hinting that something is going on.

    LarryR
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    LarryR

    Agree with HankB……….poorly managed operation. Firearm sales were through the roof for most 2008-2016. If they were the largest retailer, they should have led the way. Too expensive.

    HankB
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    HankB

    My Dad and I bought our first reloading setup from Gander Mountain when they were still just a mail-order business in Wilmot, Wisconsin, just over the Illinois border. A few years later they began selling reloading components over the counter, and prices were good enough for us to make the drive up from Chicago to stock up. Now, some 40 or 45 years later, Gander has a lot of retail stores . . . just filled with overpriced goods. Seriously, their gun prices are higher than anyone else in town, and there are no bargains to be had with their… Read more »

    RichH
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    RichH

    So very true HankB. I took my wife to Gander Mountain to look at Glock pistols, and found their prices far out of line with other stores in our area. I told the sales clerk I could purchase the same pistol 4 miles away at a small local gun store for $175 less. The clerk told me that Gander had a price match policy and as soon as he called the other store to confirm the lower price he offered the pistol at the reduced price. My wife just shook her head and wondered how many sales Gander had lost… Read more »

    HMLA-167 Warrior
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    HMLA-167 Warrior

    ^this. I completely agree. Their prices are outrageous on firearms, supplies, camping equipment, and just about everything else in the store. There are those who still purchase at these inflated prices from Gander I believe out of ignorance of pricing and I have still purchased items from them myself, albeit only at clearance time for reasonable prices. The company’s pricing policy is their downfall. Firearms profits are not what keep stores in business as the margin isnt that much to begin with. It is all of the accessories that keep the store open – ammo, holsters, targets, camping gear, clothing,… Read more »

    Jim
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    Jim

    Maybe if they didn’t have the well earned reputation of being the place to look at firearms and buy elsewhere they might have been a player. One thing you quickly realized if you purchased a firearm at Gander Mountain, you paid way too much .

    Dave in Fairfax
    Editor
    Dave in Fairfax

    Any idea which of the locations will be closing?