Gander Mountain Reportedly Preparing for Bankruptcy: What Went Wrong?

The headline spread first from Reuters, then across the cavalcade of fishing websites across the U.S—”Gander Mountain preparing to file for bankruptcy.” Suddenly, jobs at 162 brick-and-mortar outdoor stores are in doubt.

According to Reuters, Gander Mountain is already working with a financial advisory firm and legal team to prepare for a bankruptcy filing in the coming weeks. If they do file, Gander Mountain will become the fourth large scale, outdoor retail chain to file for bankruptcy in the past calendar year, joining Sports Authority, Sports Chalet, and Eastern Mountain Sports on the list of industry giants who are struggling.

Privately-owned Gander Mountain is said to have debts including a $30 million loan and $525 million in credit, though the company has not stated how much of that credit line is being used. In fact, the St. Paul-based retailer is remaining silent on the issue, leaving consumers, manufacturers and other retailers to speculate on what insiders are calling a leak that no one is confirming, with nearly every outlet pointing back to the ubiquitous, February 10 post by Reuters.

For the purposes of this exercise, we’ll play along with the caveat that an impending bankruptcy has not been confirmed or denied by Gander Mountain. 

If they fall…

While it’s tempting to point the finger of blame at Gander’s brick-and-mortar format—a template that saw them open an additional 60 stores since 2012 alone—answers are rarely so one dimensional.

Independent retailers are quick to point the finger at online outlets like Tackle Warehouse as a root cause for declining sales across the storefront industry. And while there’s no doubt that the San Luis Obispo-based seller has carved an ever-growing niche in the fishing market (they are constantly in a state of expanding logistics facilities), successful independent stores have also excelled at cultivating customer bases that crave more than a box on their doorstep. Further, the biggest online retail fish of them all—Amazon—is moving into the brick-and-mortar space this year by opening what the Wall Street Journal says could be as many as 400 stores.

Neither online retailer nor a brick-and-mortar format then are likely to be exclusive causes of Gander Mountain’s woes. Instead, consider a lack of enthusiasm from customers.

“It figures,” said Knox Crider, a regular Gander Mountain visitor in the mid-size, Jackson, Tennessee, market. “Every time I hear somebody bought something there, I think about how much they could have saved going to Academy or Bass Pro or Cabela’s. Everything they have seems to be more expensive than everywhere else.”

The 65,000 square foot West Tennessee store was the sole big box outdoor chain in the Jackson market from 2007 until Dick’s Sporting Goods, and later Academy Sports, opened in 2009 and 2016 respectively. Bass Pro Shops operates the pyramid mega-store and a sportsmen’s outlet just 80 miles away.

With generally higher prices than discount-focused competitors, and stores unable to rival Bass Pro Shops or Cabela’s in drawing power, Gander Mountain is situated in an uncomfortable position within the outdoor retail market—one that, perhaps ultimately, left them on the outside looking in.

Manufacturers say Gander Mountain has suffered from an identity crisis, shifting focus from hunting, fishing and camping to footwear to firearms quickly in the past decade, potentially confusing a customer base that has been too often unable to find the products they’re looking for in store.

So what’s to blame for bankruptcy?

As the outdoor world waits to hear from Gander Mountain headquarters, the industry seems abuzz with answers. The most common ones, however, point back to customer disconnect caused by brand confusion and market positioning.

If Gander Mountain files for bankruptcy, you could start pointing the usual fingers at online retailers and competitors, but it’s likely that many consumers will be pointing theirs straight to St. Paul.