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As the retail landscape continues to reel from the aftershocks of the COVID-19 pandemic, Heritage Collegiate Apparel Inc., formerly known as The M Den, has announced the closure of two more store locations including one at Briarwood Mall in Ann Arbor, and another in downtown Detroit. This latest development is part of the retailer's ongoing bankruptcy proceedings and restructuring efforts and was communicated through an August 19 post on their social media.
— Heritage Collegiate Apparel f/k/a The M Den (@TheMDen) August 19, 2024
Heritage Collegiate Apparel, which previously held the mantle as the official sports merchandise retailer of the University of Michigan athletics, is now down to just two physical locations, both situated in Ann Arbor. In statements obtained by the Detroit Free Press, Scott Hirth, the company's co-owner and president, attributed the financial turmoil to a series of events triggered by the pandemic. This included making thrice large capital improvements in 2019 which, along with the pandemic's advent in March 2020, led to a substantial drop in sales as the U-M campus closure effectively, "virtually all of (M Den's) customers were removed from Ann Arbor for an entire year," Hirth said.
In addition to physical store sales plummeting, Hirth indicated in his declaration that the company faced increased hardships with online sales, which carried "much lower" profit margins. The retailer also shouldered more considerable royalty payments to U-M for online sales, placing further stress on the business's financials—already strained from stocking up on $6 million worth of unmovable merchandise for the 2020 college sports seasons. In the wake of these challenges, Hirth's company found themselves taking out high-interest loans and struggling to manage inventory arrivals that came in late due to vendor supply chain issues. As reported by Detroit Free Press, this culminated in a deluge of $5 million in merchandise arriving too late for the 2022 fall football season.
Despite experiencing a fleeting surge in sales after the U-M football team's national championship season in 2023, the retailer filed for bankruptcy under the Heritage Collegiate Apparel name this past May, which was a shift from the initial M Den brand. With liabilities estimated between $10 million and $50 million, and between 100 and 200 creditors listed, Heritage Collegiate Apparel is now navigating through the challenges of bankruptcy. According to information from MLive, other debts include close to $2.6 million owed to Nike, and there are several ongoing lawsuits against the company across the country.
The financial strain extended beyond merchandise and operational debts, as the company also owes substantial amounts in rent to various entities. This includes more than $265,000 to the Ilitch organization, over $206,000 for the Twelve Oaks Mall, and debts surpassing $614,000 for the Briarwood Mall location. Moreover, the U-M athletic department was reported as having the largest unsecured claim of $8.8 million for royalty payments. The university's athletic department has yet to issue a statement regarding the ongoing situation.
