Team Sportia is in financial trouble. Due to declining liquidity, the Swedish sporting goods retailer has been granted by a court the right to suspend payments to creditors, pending a corporate restructuring process.
In its application for bankruptcy protection, Team Sportia said that it had suffered a loss of 27 million Swedish kronor (€3.1m-$4.1m) in 2012 that was mainly due to large write-downs of inventories owing to lost sales of winter products and increased personnel and warehousing costs.
The restructuring will include the shutdown of eight Team Sportia stores that the company owns and operates, as well as a reduction in the staff at its headquarters in Mölnlycke. The reorganization will not affect the chain's franchised stores.
As reported in Sportfack, earlier efforts to change the company's financial situation, including staff reductions and the renegotiation of contracts with local suppliers were insufficient for Team Sportia to improve its liquidity. It was unable to respect loan covenants with its lenders, with the result that its credit lines were terminated.
The top management says it is convinced that there is a future for Team Sportia. It has presented a budget, showing that revenues will cover costs during the reorganization.
Team Sportia is the third-largest sports retailer in Sweden with eight corporate stores, 118 franchised stores and supply agreements with more than 30 other affiliated stores. Last year, its retail sales amounted to SEK2.7 billion (€314.3m-$408.6m).
The group stopped buying through Sport 2000 International and then took over Sportex in 2010, turning it into the largest bicycle retailer in Sweden, but it has probably suffered recently from the new competition coming from foreign players such as XXL Sport and Décathlon. Team Sportia's chief executive, Frederik Andreasson, left at the beginning of this year.