Under Armour Tries To Recover From Sports Authority Bankruptcy

Share prices for the country’s second-largest sports apparel retailer have plummeted 20 percent in the last year as Under Armour struggles to find new customers to replace the bankrupt Sports Authority chain.

Carter Harrison analysts had already predicted that the company might have to endure “a tougher period” after the firm lost one of its best customers in North America. Although net sales increased over 15 percent last quarter, the growth was well below the target level and the stock price dropped again, to $31.77 per share. The company says that both sales volume and profit margins were lower than they were a year ago.

Since Sports Authority filed bankruptcy, Under Armour has increasingly relied on promotions to move unsold product.

Bankruptcy Recovery

Corporate bankruptcies often have ripple effects throughout an entire industry, but personal bankruptcies are different. Although most people have little or no control over the circumstances that prompted their bankruptcy filings, they have almost total control over their bankruptcy recoveries.

“It is the purpose of the Bankrupt Act. . .to relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh free from the obligations and responsibilities consequent upon business misfortunes.” Supreme Court Justice James Clark McReynolds penned those words over a hundred years ago, and they are still true today. Chapter 7 and Chapter 13 give debtors fresh starts, and what they do with them is almost entirely their own choice.

Although it is impossible to affix a proportion, a combination of poor financial planning and unanticipated misfortune bring about most bankruptcy filings, and the latter is nearly always much, much more of a factor than the former. Typically, a temporary job loss or serious illness disrupts income for a few months, and there is basically a snowball effect. So, recovery from bankruptcy is a two-tier approach.

Most high school and/or college economics classes at least introduce the concept of scarcity (limitless wants and limited resources), but for whatever reason, the concept does not seem to take root in many households. Basically, if expenses go up in one area, either income must go up or other expenses must go down to compensate.

One of the biggest priorities for former bankruptcy debtors is raising their credit scores. The old adage that paying bills on time is a large part of a FICO score is partially true and partially false. Some bills, like mortgage payments, credit card payments, car payments, and probably auto insurance payments, are reported to the credit bureaus monthly, and consistent on-time payments will improve most FICO scores. Other bills, like rent payments, utility payments, and probably internet/TV payments, are not reported to credit bureaus, so on-time payments will not affect FICO scores. However, most such accounts are referred to debt buyers after about ninety days of nonpayment, and “referred to collections” is almost as negative as “filed bankruptcy.” So, people who neglect their accounts are essentially back at square one.

Acquiring a credit card is a good idea as well, preferably one with a low credit limit. There is some debate as to whether it is best to pay off the balance in full every month or leave a small balance every month, but in any case, regular on-time payments are crucial.

Partner with Assertive Lawyers

Bankruptcy offers distressed consumers a fresh start. For a free consultation with an experienced bankruptcy lawyer in Chicago, contact the Bentz Holguin Law Firm, LLC. We routinely handle cases in both Illinois and Indiana.

Resource:

time.com/money/4544365/under-armour-sales-growth-slows/