Sportsman's Warehouse loses white knight, UFA
A deal that looked like it would save the Sportsman's Warehouse empire has turned sour, thanks to challenging economic times.
UFA Co-operatives Ltd., a Canadian based company, had agreed in November to buy the financially strapped sports and recreation retailer.
But as the economy continued to decline over recent months, the financial package slowly began to unravel.
Last week, UFA agreed to take possession of 15 Sportsman's Warehouse stores in Washington, North Dakota, Montana, Oregon and Idaho in exchange for its original loan to Sportsman's Warehouse.
With the news that UFA was backing out of the bigger deal, Sportsman's Warehouse Chairman Stuart Utgaard announced the closing of 23 stores in 17 states. All three stores in Minnesota (Woodbury, St. Cloud and Coon Rapids) are slated for closure in the coming weeks.
Utgaard, who has a small corporate office in Star Prairie, said he continues to seek ways to build the company back up.
A total of 29 stores will remain open, he said. At its peak, Sportsman's Warehouse touted 67 stores.
"We'll use those 29 stores as a base to grow," he said Friday.
Nevertheless, the current picture is a significant departure from a few years ago when Utgaard was enjoying growing sales and an expanding retail chain while other major recreational retailers were hurting.
A 1963 New Richmond High School graduate, Utgaard purchased a single Sportsman's Warehouse store in Midvale, Utah in 1996 with an eye toward growth. Sales eventually grew to nearly $1 billion annually.
The success story was quite an accomplishment for the local boy, who took over the 100-year-old Utgaard Hatchery in Star Prairie from his dad in 1971. He expanded that business from 150,000 chicks hatched annually to 2.2 million at its peak.
Utgaard eventually developed a side venture, Enterprise Investments, where he assisted multi-million companies negotiate sales and mergers.
By the time the Sportsman's Warehouse purchase came along, Utgaard decided to get rid of the hatchery business.
The announced store closures and sale of 15 stores to UFA will apparently help reduce company debt.
According to reports elsewhere, Utgaard continues to seek a new credit arrangement with banks or new financial partners to help stabilize the remaining operation.