Sport Chalet announces new strategic plan and $65-million credit agreement
After a difficult few years, Sport Chalet Inc. may be getting back on track.
The La Canada Flintridge-based sporting goods chain announced early Thursday that it obtained a new and improved line of credit with Bank of America and will look at closing some of its 55 stores while opening new locations.
Founded in 1959, Sport Chalet's stores operate in many of the nation's worst-hit housing markets. Even at reduced prices, the regional chain's premium snowboards, camping gear and athletic apparel have been a tough sell in the current economic environment.
In the stock market crash, its share price plummeted to 18 cents in March 2009, down from more than $11 in 2007. The stock closed Wednesday at $1.58, down 3 cents.
Since the recession began, the company has been renegotiating rent on existing stores, deferring store openings, working to improve inventory management and reducing other expenses.
"We've just gotten so much more efficient and tougher," Chief Executive Craig Levra said in an interview. "There's no wind on our back; we have to row."
Now, Levra said, the company will aggressively examine the possibility of closing underperforming stores and replacing them with better sites.
"The economy's a disaster," he said. "California, Arizona and Nevada are a mess. The good news is even though we're geographically focused there and we're feeling the brunt of it, our teams have really shown an unending resolve to fight through this."
The company's new four-year, $65-million credit agreement replaces a $45-million credit line with BofA. Sport Chalet said a lower interest rate and other improved terms in the new accord would increase the retailer's financial flexibility.
"Based on the progress that has been made over the past two years, we are happy to reaffirm our commitment to Sport Chalet and help the company move forward in implementing the next phase of its business strategy," David Darnell, president of global commercial banking at Bank of America, said in a statement released by Sport Chalet.
-- Andrea Chang