Huge Retail Lease Costs Drive West Marine To Seek Bankruptcy Protection, Plan Store Closures
Headwinds from lease costs, inflation and supply chain disruptions have made the retail waters too choppy for a national boating supply chain.
West Marine Inc. filed for bankruptcy protection on Sunday in the U.S. Bankruptcy Court for the District of Delaware due to declining sales and long-term lease obligations that drained the company's liquidity. West Marine has a fully leased real estate footprint that costs more than $50M per year in rent, CoStar News reported.
The company operates around 200 stores in 34 states and Puerto Rico. It has nearly $167M in future lease obligations and almost $120M in trade and lease liabilities that were unpaid when the company filed for bankruptcy.
Many of West Marine’s leases were signed when the company’s sales were stronger and therefore offer limited flexibility to renegotiate terms or close poorly performing locations without court protection.
As part of its Chapter 11 restructuring plan, West Marine could close stores, renegotiate leases and sell assets as it seeks to create a sustainable cost structure.
West Marine didn’t immediately respond to Bisnow’s request for comment on the filing.
“The actions we are taking today will allow us to optimize our operations and rationalize our footprint, so that we can focus on continuing to serve our customers and community well into the future,” West Marine CEO Paulee Day said in a statement.
The company hired Hilco Real Estate to help identify lease savings and assess potential store closures.
West Marine reached an agreement with its secured lenders to allow the retailer to use its available cash to pay vendors and its roughly 2,600 employees during the Chapter 11 process. Those creditors are also committed to providing the company with new financing in support of its exit from bankruptcy.
West Marine was founded in 1968 as a small rope business before growing into a top retailer of marine parts and boating accessories. Expansion continued after the company went public in 1993, though it returned to private ownership in 2017, according to Bloomberg.
The pandemic boosted interest in outdoor recreation and the company’s sales in 2020, but that boost didn’t last. Rising inflation and supply chain issues prompted a pair of debt restructurings by 2023.
Severe weather conditions cut boating seasons short in 2024 and 2025, slowing traffic to West Marine’s stores.
West Marine wasn’t the only outdoor recreation company hit by the post-pandemic drop in consumer spending.
Outdoor apparel retailer Eddie Bauer filed for its third bankruptcy in February and announced plans to close more than 150 stores.
After a wave of retail bankruptcies in 2024 and 2025, department store chain Saks Global was the biggest retailer to declare bankruptcy so far this year. It filed in January and announced plans to close 62 stores.
