NEW YORK -- Sports Authority filed for bankruptcy early Wednesday and said it will close 140 stores, nearly a third of its total.
The bankruptcy has been looming since January, when the company disclosed that it had missed a $20 million debt payment.
The store closings will take place over the next three months. The bankruptcy filing will allow it to break leases for money-losing stores. The company's filing disclosed more than $1 billion in liabilities and assets valued at less than $50,000.
The company was once the largest sporting goods retailer. But it has struggled with the debt load associated with a leveraged buyout a decade ago. It has been overtaken by Dick's Sporting Goods, which has grown by providing a more high end shopping experience.
"Someone who wants to shop in a brick-and-mortar store and try on the baseball glove, or get the feel of a golf club, wants a better shopping experience," said Larry Perkins, of SierraConstellation Partners, an expert in retail reorganizations. "That's not Sports Authority any more."
Sports Authority is just the latest retail giant to fall on hard times as more and more shopping moves online.
Circuit City went bankrupt in 2008, followed by Borders in 2011. Both eventually closed. RadioShack went bankrupt a year ago, and American Apparel filed in October, although both companies remain in business with fewer stores.
For Sports Authority, the online competition has come from online retailers such as Amazon and Fanatics, and also retail sites run by sports leagues such as the NFL and NBA.
"You used to go to Sports Authority or some other store to buy your fan gear. Now it's much easier to find online," said Perkins.
Sports Authority spends $6 million a year to have its name on the stadium that is home to the Denver Broncos, which just won the Super Bowl. Whether that 25-year naming rights deal will continue under the bankruptcy is unclear.
"This was a tough decision to make, but we believe it was a necessary step in our plan to make Sports Authority an even better partner for our customers," said CEO Michael Foss.