A 1986 cover story in Corporate Report, a local magazine of that era, called Stuart B. Utgaard “Minnesota’s hottest matchmaker.” The cover photo showed him on the hood of his red Ferrari.
As a mergers and acquisitions broker, Utgaard had the Midas touch. In the 1980s and ’90s, if you wanted to sell a company and needed to find a buyer, Utgaard was the go-to dealmaker.
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“Lessons Learned”
“Sportsman’s Warehouse was truly a victim of the banking crisis and the Great Recession,” Stu Utgaard writes on the cover of The Sportsman’s Warehouse Story, his book detailing the company’s rise and fall. Yet inside, he also posits that one cause of the company’s bankruptcy could have been “an overly aggressive CEO who expanded too fast without proper capitalization.” “He ends the book with a list of “Lessons Learned,” some to do with building a corporate culture, others, including this one, more directly gleaned from hard experience.
Lesson #6 “Attempt to create a solid financial footing with ample cash reserves. While few if any saw the severity of the developing recession and its sudden onset, our lack of liquidity created an immediate problem. |
But in the late ’90s, Utgaard let his M&A business dwindle. He’d made an acquisition of his own in 1996, a sporting goods store in Utah for which he and another broker had had trouble finding a buyer. He built that single outlet into a nationwide retail chain called Sportsman’s Warehouse.
By 2008, Sportsman’s Warehouse had 73 stores in 33 states, including Minnesota. It had 5,300 employees and annual revenues of $718 million. It became the fourth-largest outdoor retailer in the country, trailing only Bass Pro Shops, Cabela’s, and Gander Mountain.
Utgaard’s ambition was to take the company public that year. So a couple years earlier, in 2006, he had turned down an offer (from a private company whose name he doesn’t disclose) of more than $264 million for his ownership stake. That proved to be a mistake. Because last year, Utgaard lost it all.
In March 2009, the highly leveraged Sportsman’s Warehouse filed for Chapter 11 bankruptcy protection. Unlike other notable retailers that disappeared in 2008 and 2009—Circuit City, Mervyns, Linens ’n Things—Sportsman’s emerged from bankruptcy last August. But it did so under new ownership, having liquidated or sold more than half of its stores. Utgaard walked away with nothing.
Today he is personally bankrupt and deeply in debt. He lost $1.2 million on a house in Utah. In his hometown of Star Prairie, Wisconsin, he lost a 3,500-square-foot office building and a parcel of land that had belonged to his family for more than 100 years. His lakeside home near Star Prairie, built seven years ago, is currently assessed at $500,000 less than he owes on it, “so I’m poised to lose about $2.5 million there,” he says.
