Mountain Warehouse makes bid for Eastern Mountain Sports assets following bankruptcy

Outdoor apparel retailer Mountain Warehouse has emerged as the stalking horse bidder in an acquisition process of bankrupt Eastern Mountain Sports (EMS), leading to the possible closure of a number of the latter’s stores.

Mountain Warehouse did confirm that if the alliance was to go ahead it would continue to operate seven stores under the EMS name, yet remaining locations would close and, as such, discounted inventory will be offered.

In the US, where the aforementioned companies are based, the term ‘stalking horse bidder’ refers to an initial bid made by an interested buyer for the assets of a bankrupt company that then opens up the court supervised process for further potential bidders, thus testing the market and possibly maximising the value of the assets in question in what is typically a fair manner.

In the case of Mountain Warehouse, the bidder was selected by EMS to move forward with this process as it is believed the company will honour and preserve EMS’ legacy and continue to serve the community through plans to further strengthen relationships with recognised outdoor brands.

One of the significant benefits of the prospective alliance, as stated by EMS, is the “ability to retain and support dedicated employees” of the retailer, with the company to maintain a “robust” brick-and-mortar presence where expert advice will continue to be on hand for customers.

In addition to this, and a factor that had also been outlined in EMS’ Chapter 11 restructuring petition filed on June 18, Hilco Merchant Resources and Gordon Brothers are to manage liquidation sales at select EMS locations as part of a joint venture to ensure a maximised value of existing inventory.