West Marine has filed for Chapter 11 bankruptcy protection after years of mounting pressure from high leasing costs that executives said drained cash and blocked recovery efforts.
The Fort Lauderdale, Florida-based boating supply retailer, operating roughly 200 locations nationwide, faces annual lease expenses exceeding $50 million tied to its fully leased store network, according to court filings.
Those obligations became a central driver of the bankruptcy. West Marine's "expansive real estate footprint and long-term lease obligations" depleted liquidity and "proved an insurmountable obstacle" outside of a court-led restructuring, CEO Paulee Day said in a filing.
The company's stores span more than 34 states and Puerto Rico, with each location leased rather than owned. Despite the filing, the company said it remains open for business and expects to continue operating its stores and online platforms during the bankruptcy process.
The fixed costs tied to that footprint have weighed heavily on performance. Rent, utilities and other store-level expenses "consistently consumed a disproportionate share" of operating cash flow, eroding margins and limiting investment in the business, the company stated in its bankruptcy declaration.
In total, the company carries about $166.7 million in future lease obligations, alongside $119.9 million in unpaid trade and lease liabilities as of the filing date.
Many leases were signed during stronger retail conditions, executives said. Those agreements now limit flexibility, making it difficult to exit underperforming locations or renegotiate terms without court protection.
The company retained Hilco Real Estate to analyze potential lease savings and wind down any stores not part of the company's go-forward store footprint.
The Chapter 11 filing provides tools to renegotiate leases, shed underperforming locations and rightsize the store footprint, the company said. The restructuring could include store closures, lease renegotiations and potential asset sales as the company seeks a sustainable cost structure. West Marine declined to comment further to CoStar News.
West Marine expanded aggressively over decades, a strategy that worked during the pandemic-era boating boom, when demand surged. But as consumer spending pulled back and economic pressures intensified, the store network became a liability, the company said.
Declining discretionary spending, inflation and supply chain disruptions all weighed on sales. Meanwhile, weather disruptions shortened key boating seasons in 2024 and 2025, further reducing store traffic.
The mismatch between falling revenue and fixed lease costs deepened losses. Many stores became unprofitable, yet long-term contracts prevented timely closures or restructuring efforts outside Chapter 11, the company said.
A restructuring agreement backed by key lenders outlines plans to address lease costs as part of a broader effort to reduce debt and improve liquidity.