Sporting goods retailer Joe's files for bankruptcy

PORTLAND, Ore. - Joe's Sports & Outdoor, with 30 retail outlets in the Pacific Northwest, has filed for Chapter 11 bankruptcy protection, the company said Wednesday.

The Wilsonville-based company, formerly G.I. Joe's, said it will operate all of its stores and continue paying wages and benefits during the process.

"This restructuring process will allow us time to address our capital challenges so that we can potentially emerge an even stronger company with a firm financial position," said Hal Smith, chief executive and president, in a statement.

Joe's obtained $50 million from Wells Fargo Retail Finance to fund the restructuring, subject to court approval. The bankruptcy filing was made in the U.S. Bankruptcy Court in Wilmington, Del.

The chain was purchased by private equity firm Gryphon Investors of San Francisco in 2007. The decision to file for bankruptcy follows a strategic review announced by the company last month during which it temporarily laid off warehouse workers and explored ways to bring more capital to the business.

David Andrews, Gryphon's president and managing general partner, said the firm is "deeply disappointed" that Joe's filed for bankruptcy protection.

"Unfortunately we could not come to mutually acceptable terms with the lenders," Andrews said. "It is our hope that a solution is found through the bankruptcy process that enables Joe's to continue on as a viable business for many years to come."

G.I Joe's was founded in 1952 by a former World War II pilot who sold military surplus goods.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.