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Vestis Retail Group LLC — the company behind Eastern Mountain Sports — filed for bankruptcy earlier today in Delaware, citing shifting U.S. shopping habits as their biggest downfall.
It's no secret that outdoor retailers are struggling these days. While the outdoor apparel industry continues to grow (bringing in $4 billion in revenue in 2014), legacy retailers have struggled to keep up with and appeal to younger, internet-savvy consumers who want goods that are both functional and trendy.
Vestis, which also owns outdoor gear chains Sport Chalet and Bob's, filed a Chapter 11 petition quoting $500 million in liabilities and less than $50,000 in assets. As of right now, they'll be closing all 47 Sport Chalet stores throughout the U.S., one Bob's store in Portland, Maine, and eight EMS locations.
According to a Bloomberg report, Vestis generated $660 million in annual revenue and employs 4,000 people across all three businesses.
"The continuing shift in consumer behavior away from traditional brick-and-mortar retailers and toward online-only stores, together with increased competition from big-box and specialty sporting goods retailers, have contributed to an industrywide weakness," said Mark Walsh, chief executive officer of Vestis, in the court filing.
This industrywide weakness Walsh refers to has been a problem for quite some time now, especially for EMS, which closed both of its New York City locations this February and March.
"Given this new type of shopper, brands like Lululemon and Nike will eventually eat outdoor outfitters for lunch," Steve Casimiro, founder of Adventure Journal, told Racked last year.
Vestis does plan to restructure their models for EMS and Bob's, hopefully with a new strategy in place that speaks the social media-driven language of their biggest spending consumer — the millennial.
"Everyone used to want to be one of those guys getting to the top. But what has shifted, and what the outdoor industry is scrambling to figure out, is that for most people, that's no longer their model. There's rapidly been a whole new wave of people who want to experience the outdoors in a different way. Some are millennials, some are not, but they just want to be outside and they don't look like the type of folks the outdoor industry has targeted in the past," Casmirio says.