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Modell’s Sporting Goods is preparing to file for Chapter 11 bankruptcy as soon as Sunday, The Post has learned.
The 131-year-old athletic gear retailer has stopped shopping for a white-knight investor to help renegotiate its 140 leases across nine US states and the District of Columbia, and is likewise giving up on getting better terms from its vendors, Chief Executive Mitch Modell confirmed on Friday.
In an interview last month, Modell had blamed his company’s woes on “lousy” local sports teams that have depressed jersey sales, as well as a shorter holiday selling season and the warm winter, which hit jacket, boot and glove sales.
At the time Modell’s, which has 2,900 employees, had sent a letter to 19 building and mall owners, asking them to “dig deeper” and lower rents or at least defer them to help the retailer avoid a bankruptcy.
On Friday, the CEO — who famously disguised himself with an oversize walrus mustache on the CBS reality show “Undercover Boss” in 2012 — said landlords and vendors alike have balked as Modell’s faces increased competition with Amazon and a slew of big-box retailers.
“We have been totally transparent that if we get 90-percent support collectively from our vendors and landlords that we would have a successful path moving forward,” Modell told The Post.
Many of the landlords, however, wanted to recapture their spaces if they were able to find a new tenant, according to Modell.
“That was a dealbreaker and our vendors didn’t want to expose themselves any more than they were,” he said.
As talks to avoid bankruptcy hit a wall, Modell’s is instead hoping that JackRabbit — a Denver-based sportswear retailer that bought Olympia sports brand last year — will buy it out of Chapter 11, a source with knowledge of the situation told The Post.
Modell confirmed that the earliest the company will file for bankruptcy will be on Sunday. He declined to confirm whether the company is in discussions with JackRabbit.
“A lot of companies are taking a look at us,” he said.
Wells Fargo and JPMorgan Chase, who are Modell’s biggest lenders with about $50 million in outstanding debt, will likely provide the debtor in possession financing.
Modell’s recently sold its Bronx warehouse to raise extra cash.
JackRabbit, which is owned by CriticalPoint Capital, announced a deal to buy Olympia Sports of Maine in October. The company, which operates 135 stores across the country, didn’t respond to requests for comment.
Four generations of the Modell family have run the business, which has weathered the Great Depression and multiple recessions. The first store was opened in 1889 on Cortlandt Street in lower Manhattan by Morris Modell, a Jewish immigrant from Hungary. His brother George owned a chain of pawn shops in the city.
And while the business has shrunk in recent years — it had 150 stores a year ago and announced in January that it would be closing nine stores — its deep-pocketed owner was willing to put his own funds on the line to save the business.
Last year, Mitch Modell loaned the business $6.7 million to save it from a potential bankruptcy.