Austin-based Backwoods, a retailer of outdoors equipment and clothing which has a store in Fort Worth, has filed for Chapter 11 bankruptcy citing competitive pressures from online and big-box retailers.
On Thursday, a bankruptcy judge approved an emergency request from Backwoods to borrow $3 million to buy inventory in time for the holiday shopping season and pay vendors, employees and rent. The bankruptcy petition was filed Wednesday in Fort Worth.
“Backwoods, like other outdoor retailers, has experienced reduced sales, decreased net profit margins, and more recently liquidity issues,” Jennifer Mull Neuhaus, Backwoods’ president, said in a filing. “The holiday season is one of the most important sales periods. Backwoods derives approximately 30 percent of its annual revenue from holiday sales.”
Mull Neuhaus could not be reached for comment Wednesday, but the company issued a statement saying there are no immediate plans to close stores or its e-commerce websites, or make changes to Backwoods Adventures, its travel company.
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“We continue to believe in the industry and in our business,” she said. “We believe with the financial restructuring of the company and several key changes in our overall corporate strategy, we will emerge a retailer capable of success in this new retail environment.”
The company, founded in 1973 with a single store in Wichita, Kansas, has grown to 10 stores in Arkansas, Kansas, Nebraska, Oklahoma and Texas, and operates stores in Colorado and Missouri under the names Neptune Mountaineering and Dynamic Earth. It also sells merchandise at Backwoods.com and Neptunemountaineering.com. It has 150 employees. It opened its Fort Worth store in 1978, according to its website.
In 2008, Backwoods bought the former Acme Brick property at 2727 W. Seventh St. to move its store from Camp Bowie Boulevard.
The company has annual sales of $18 million, court filings said. Historically, it has financed its operations from that but recent struggles have forced the retailer to borrow money in the past 18 months, court records said.
The Chapter 11 petition includes Neuhaus’s Jo-Jo Holdings, a major shareholder which the filings said is based in Fort Worth; Backwoods Retail, Inc., and Backwoods Adventures, Inc. The debtors list assets of up to $10 million, but liabilities of $10 million to $50 million.
In an effort to maintain customer loyalty, Backwoods is asking for permission to continue honoring gift cards that were issued prior to the bankruptcy filing. There are about 5,600 outstanding gift cards, the filing said.
Also, Backwoods Adventures wants to be able to honor trips already purchased and refund deposits if a customer so requests. Currently, the company holds less than $5,400 in trip deposits, filings said.