Dive Brief:
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Struggling sports gear retailer Sports Authority, said to be on the brink of filing for bankruptcy protection, is in talks to sell stores and assets to rivals including Dick’s Sporting Goods, Bloomberg reports.
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It’s still early days for private talks, so no details as to how many stores might be involved are available, and any such sale would take place as part of the bankruptcy process, Bloomberg reports.
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Neither Sports Authority nor Dick’s has commented on the report. Several news outlets last month reported that Sports Authority is preparing for bankruptcy protection to reorganize and is considering selling as many as 250 stores as part of that process.
Dive Insight:
In 2006, when Sports Authority was acquired by private equity firm Leonard Green & Partners LP for $1.3 billion, its future was bright. But competition in the space has intensified and morphed. There's now a newfound appreciation for women’s fitness and a strong "athleisure" market, plus assertive moves by retailers as diverse as Dick’s Sporting Goods, Lululemon, Gap’s Athleta, discount retailers like Target, and Amazon to capture those segments.
Once the largest sports gear retailer in the U.S., Sports Authority is buckling under the competitive pressure and a massive debt. It's made worse by an atypical stadium-naming deal in home state Colorado that obligates it to cough up $6 million a year with at least four more years to go, rather than a one-time payment.
But the company’s fortunes are more likely falling on its failure to keep up with changes in the space. The fierce competition has already felled smaller chains, including Boston-based City Sports, which filed for bankruptcy protection in October last year. Sports Authority missed a $21 million interest payment in January and has laid off 100 employees at its Englewood, CO, headquarters.
