Sports Authority, which once dreamed of becoming the biggest U.S. sporting-goods retailer, is now working to stave off bankruptcy after failing to capitalize on a fitness boom that’s benefiting upstart competitors.

The company is struggling to persuade creditors to reduce its outstanding debt as it tries to avoid filing for Chapter 11 reorganization, according to people with knowledge of the matter. Sports Authority skipped an interest payment last week on $343 million of subordinated debt maturing in 2018 and has been talking to the bondholders about taking a loss on the notes in exchange for other securities, said one of the people.

The company, which has at least $643 million in debt, may seek bankruptcy protection if it fails to agree on a deal with the bondholders, said the people, who asked not to be named because the talks are private. Sports Authority entered a 30-day grace period last Friday, according to Moody’s Investors Service. After that, a default is triggered if the interest payment still isn’t covered.

The subordinated bondholders have hired Houlihan Lokey Inc. to help negotiate with the retailer, the people said. The company added FTI Consulting Inc. to its team of advisers, said the people.

Representatives for Sports Authority, FTI Consulting and Houlihan Lokey declined to comment.

Sports Authority, which has more than 450 stores, said on Friday that it had agreed with lenders not to make a $20 million interest payment on its subordinated notes. The decision was made after months of deliberations with its advisers and as talks with creditors continued, the company said in a statement. Rothschild & Co. and Gibson Dunn & Crutcher LLP have been advising the retailer.

Sports Authority was bought by a group led by private equity firm Leonard Green & Partners LP for $1.3 billion in 2006. At the time, it was vying to be the largest sporting-goods retailer in the U.S. But in the decade since, the company has struggled to keep up with competition from old rivals such as Dick’s Sporting Goods Inc. as well as newer entrants like Lululemon Ahtletica Inc., Gap Inc.’s Athleta and even Amazon.com.

According to analysts, Dick’s has been doing what Sports Authority should have done: expanding online and with new locations. Today Dick’s is the largest sporting-goods chain, with $6.8 billion in revenue in fiscal 2015 and 645 stores. Nine years ago, the two were neck and neck in revenue.