By Tanya Agrawal
(Reuters) - Tennis racquet maker Prince Sports Inc, which pioneered the oversized racquet, filed for bankruptcy protection in a U.S. bankruptcy court citing increased competition, piling debt and a decline in discretionary spending post the financial crisis that led to falling sales.
The company, whose products have been used by well known tennis players like Maria Sharapova, Patrick Rafter, Martina Navratilova and Gael Monfils, was founded in 1970 and also sells sports footwear, apparel and accessories for indoor court sports like squash and racquetball.
Prince has changed multiple hands in the past decade. Lincolnshire Management Inc had acquired Prince from Benneton Group, the parent company of United Colors of Benneton, in 2003. Lincolnshire Management later sold the company to Nautic Partners in August 2007.
Prince engaged UBS in November 2010 to start a process to sell rights to its brands and operations in China, but aborted the process when it did not receive any acceptable bids.
The company then decided to start another sale process in October 2011 and hired Robert W. Baird, which found nine potential investors.
That sale process too ended when the company was in negotiations with the final three parties who would have paid substantially lesser than the existing secured debt, Prince said in its bankruptcy filing.
Prince sells its products through brands like "Ektelon," which sells racquetball racquets, footwear and gloves and "Viking Athletics," through which it sells platform tennis paddles, balls and gloves.
Prince listed assets in the $50 million to $100 million range and said it owes $65 million in secured debt to Authentic Brands Group (ABG)-Prince LLC and about $10.2 million in trade debt to its vendors.
The company, which filed for Chapter 11 protection, expects to be owned by ABG-Prince, which holds much of its debt. ABG-Prince will cancel the secured debt in exchange for 100 percent new equity in the reorganized company, Prince said in its bankruptcy filing.
ABG is a brand development and licensing company which has managed prominent consumer brands like Marilyn Monroe, Bob Marley and Polaroid among others, according to its website.
Prince will have to seek approval from the bankruptcy court regarding all its restructuring plans.
The Bordentown, New Jersey-based company, which sells its products to retailers like Wal-Mart and Dick's Sporting Goods Inc, has secured $2.5 million in debtor-in-possession financing.
Prince said it will use the bankruptcy process to develop a more competitive business model.
"We anticipate to emerge from this period as a more efficient, performance racquet sports brand with a more competitive model in the market, while eliminating the economic constraints that have prohibited the brand from achieving its potential," chief executive Gordon Boggis said in a statement.
The case is In re:Prince Sports Inc et al., U.S. Bankruptcy Court, District of Delaware, No:12-11439.
(Reporting by Tanya Agrawal in Bangalore; Editing by Supriya Kurane)