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A Modell's employee ripped a sign off a wall as Modell declared “we are not closing guys we are going to stay open.” His announcement was met with cheers from employees whose jobs had just been saved.
The two additional stores, both located in New York City, were saved after receiving support from the public, bringing the number of avoided closures to seven and saving a total of 129 jobs.
Modell told FOX Business' Maria Bartiromo a line of investors are looking into lending their support to the company and he is optimistic about the future.
On Monday, Modell told Stuart Varney that following an appearance on "Mornings with Maria," he received an outpouring of support and was able to rescue five of the 24 stores on the chopping block from closure, saving 81 jobs. Of the five spared stores, three were in Pennsylvania, one in Virginia and one in New York.
Of the 24 stores first slated to close, five are located in New Jersey, eight in New York, four in Pennsylvania, and the balance are in either New England or the Washington, D.C., area.
The stores were saved by Modell’s renegotiation with landlords who, if the company went bankrupt, would lose two year's worth of rent.
Modell had initially told Maria Bartiromo that the sports retailer would be forced to close 24 locations and could sell a minority stake in the company due to financial difficulty.
In March of 2019, the company’s financial turmoil began when the Wall Street Journal reported the retailer had brought in Berkeley Research Group as a financial adviser to explore steps including filing for bankruptcy. The report led to vendors refraining from shipping products to Modell’s, insurance companies cutting off the company and its credit rating being downgraded, according to Modell.
At the time of the Wall Street Journal’s article, Berkeley was hired as a consultant to help the company with merchandising operations, according to Modell, not for corporate restructuring.
The company lost $50 million in sales in 2019 as a result of a warm winter, “lousy” local sports teams, six fewer days between Thanksgiving and Christmas, the rise of internet retail and the Wall Street Journal piece.
Modell told FOX Business that if the company can get 90 percent support from its landlords and vendors, combined with selling a minority stake, it would have a path to success.
Modell’s was founded by Mitch Modell’s great-grandfather Morris A. Modell in 1889. The company has been family-owned ever since and, prior to the announced closures, operated 141 stores.