The bankrupt Ann Arbor retailer formerly known as The M Den is attempting to sell itself quickly, before too much of this year's University of Michigan football season is over.
Lawyers for the retailer, now called Heritage Collegiate Apparel, this week asked a judge in the bankruptcy case to approve an expedited sale process for what's left of the business, saying that two potential buyers want to finalize the sale while there are still home games left on the team's calendar, because football home games are great for selling merchandise.
The first of this season's eight home games is to kick off Saturday at the Big House against Fresno State.
The court documents name two potential buyers for the retailer: Lids Holdings and an unnamed company.
Lids is a retailer of licensed athletic apparel that, according to the court documents, is an affiliate of private equity firm Ames Watson and the Fanatics sports-merchandising company.
Lids' opening bid, known as a stalking horse bid, expires Sept. 20 if a sale hasn't happened by then. Heritage Collegiate Apparel wants the court to approve a Sept. 6 deadline for purchase bids for the business, with Sept. 12 as a potential sale closure date.
The purchase price in Lids' bid is 62% of the cost value of the retailer's inventory on hand at the time of the closing, estimated to equal about $4.25 million, court documents say.
Judge Thomas Tucker is to consider the expedited sale request at a hearing Wednesday in the federal courthouse in downtown Detroit.
"Closing the purchase of (the retailer's) assets after the university’s home football games have been played is like closing on the purchase of a beach resort in November," lawyers for Heritage Collegiate Apparel wrote. "The purchaser would not expect to see significant profits until the following season, which will drive down the purchase price."
U-M this month stripped Heritage Collegiate Apparel of the right to use The M Den name as well as the MDen.com website, which recently went dark.
The retailer also this month closed three of its five permanent stores, leaving only the flagship store on State Street in Ann Arbor and a Main Street store, also in Ann Arbor. The shuttered stores were inside Briarwood Mall in Ann Arbor and Twelve Oaks Mall in Novi and on Columbia Street in downtown Detroit. (The retailer also sells merchandise from a tent at the corner of Stadium and Main streets in Ann Arbor, across from Michigan Stadium, on game days, graduation days and other special events.)
The retailer filed for Chapter 11 reorganization bankruptcy on Aug. 16.
More: M Den co-owner blames pandemic for retailer's bankruptcy
The university's athletic department has told U-M licensees it is in talks with Legends Global Merchandise, part of a multifaceted New York-based sports business firm, to be its next "Official Team Store" and operate under The M Den name.
Lawyers for Heritage Collegiate Apparel said in court documents that the retailer, with the encouragement of the university, began contemplating a sale in February and seeking possible buyers.
The retailer had been the U-M athletic department's official merchandiser since the early 1990s, when it started doing business under the name M-Den Inc., with the exception of a short break in 2009 when it lost the deal for about a year. In recent days the retailer covered up the "M Den" signs at its two remaining Ann Arbor stores.
One of the business' co-owners, Scott Hirth, recently described in court documents how the pandemic and related supply-chain issues among vendors plunged the business into a deep financial hole, one so deep that even surging sales from the football team's 2023 national championship season couldn't lift it out.
Representatives for Lids could not be reached for comment Thursday afternoon.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on X @jcreindl
This article originally appeared on Detroit Free Press: Bankrupt M Den retailer is racing to sell itself while football season still young
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