Multichannel outdoor apparel and gear merchant Gander Mountain announced September 28 that it plans to become a private company in order to improve its performance.
Despite a recent push into multichannel retailing, Gander Mountain is struggling. For its fiscal second quarter ending August 1, the company reported a consolidated net loss of $7.3 million, more than the $4.9 million reported during the same period last year. Consolidated sales declined 1.8% year over year in the second quarter, totaling $248.4 million. Sales in the direct segment decreased 5.4% year over year, totaling $37.6 million.
Gander Mountain operates 116 outdoor lifestyle stores, three outlet stores, the Gander Mountain Web site and the Overton’s water sports catalog and Internet business.
The company said in a statement that the decision to go private was made because “the disadvantages of remaining an SEC-reporting company, including the costs associated with ongoing regulatory requirements, outweighed the benefits of public company status to the company and its shareholders.”
Once Gander Mountain becomes a private company, “it intends to continue its efforts to improve operating performance and reduce its outstanding indebtedness,” the company said in a statement.
The plan to go private includes ceasing the registration of Gander Mountain’s common stock with the Securities and Exchange Commission. The company expects that as a result, its shares of common stock will cease to be listed on the Nasdaq exchange. The company expects to be privately owned by early 2010.
According to published reports, the company significantly increased its advertising budget for print, radio and TV in the second quarter.
Gander Mountain went public in 2004 after selling its catalog business to Cabela’s in the mid-1990s to avoid bankruptcy. Its retail business was acquired by Holiday Companies, which spun it off.
Yet when a revitalized Gander Mountain began selling shotgun barrels on its Web site in 2003, several years of lawsuits with Cabela’s followed. In the summer of 2007, a US District Court in Minnesota gave Gander Mountain the right to use certain Gander Mountain trademarks in direct marketing.
