Yet another one bites the dust. The City Sports store, which so eagerly opened its doors last September 2014 in Manhasset, is no longer a viable interest. The store opening was a major foray into the suburban market by the company which had been in existence for over 30 years. The store was started in 1983 in Boston by two high school tennis partners, Mike Kennedy and Eric Martin, looking for athletic gear in their neighborhood. However, it is not just the Manhasset store that closed, it is the entire chain. City Sports is 83 percent owned by funds affiliated with Highland Capital Partners.
In April of 2014, the company was already having difficulties and had hired financial advisers of FTI Consulting, Inc. to help the company reduce costs. The company was advised to cut employees and to decrease sales staff, but had a much tougher time with renegotiating leases. City Sports had over two dozen locations in the Northeast from Massachusetts to Washington DC, so it was curious that they opened up a flagship store in Manhasset with such high rents.
According to a former employee, who asked not to be named, the store had sales goals of $5,000 per day, but fell short. According to Marty Hanaka, current chief executive officer of City Sports, deviating from its strategy and expanding to suburban locations caused the demise of the chain because of their poor performance and high rents. Hanaka has held this office since July 2015. According to Bloomberg Business, he serves as the CEO of Golfsmith International Holdings, Inc. and was an operating partner at Highland Capital partners since August 2014. He is a former retail executive (Chairman Emeritus of Sports Authority) and investor.
Last month, October 2015, City Sports entered into Chapter 11 bankruptcy. The Manhasset store as well as seven other stores were in the process of closing their doors, but the remaining 18 stores were continuing operations. That has now changed and the entire chain will be history. The asset sale is in the process of being finalized in Delaware bankruptcy court in November. The chain employed 816 people and entered bankruptcy claiming $38.6 million in assets with $39.6 in liabilities. Remaining stores will close by year-end.
