Dive Brief:

• U.K. sports retail company Sports Direct announced on Friday that it received the approval of the Delaware Bankruptcy Court to acquire certain assets of Eastern Outfitters LLC, including the businesses of Bob's Stores and Eastern Mountain Sports for $101 million in cash, according to a company press release.

• Sports Direct, through share bought between March 30 and April 13, also acquired a 7.9% stake in The Finish Line Inc., according to a regulatory filing cited by SBG Media. The stake makes Sports Direct the fifth-largest shareholder of Finish Line, according to FactSet data cited by SGB.

• The acquisition of the Eastern Mountain brands includes (following closures) approximately 50 Bob's Stores and Eastern Mountain Stores retail locations in the U.S., selling predominantly sports and casual wear, as well as outdoor and camping equipment and clothing the company said. The deal is expected to close in the first half of May.

Dive Insight:

The fresh acquisition gives U.K.-based Sports Direct a footprint in U.S. brick-and-mortar retail and a platform from which to grow U.S. online sales. The purchase funds for the deal have either been advanced by Sports Direct by way of debtor-in-possession and other loans to Eastern Outfitters as part of the Chapter 11 process, or they've been used by Sports Direct for the acquisition of Eastern Outfitters' debt, in each case in the period since Jan. 27, the company said in a press release. Eastern Mountain's acquired businesses incurred a pre-tax net operating loss of $26 million, and as of Jan. 28 their gross assets were $126 million, according to Sports Direct. 

Last year, Eastern Outfitters' previous owner, Vestis Retail Group, shuttered regional sports retailer Sport Chalet in order to focus on its Bob’s and Eastern Mountain Sports operations, and it ultimately sold those retailers to Versa Capital Management. At the time, Eastern Outfitters had more than $400 million in annual revenue, but its financial stability didn't last.

Fierce competition in the sporting goods space has taken its toll on many players in the sector — felling Sports Authority, which filed for bankruptcy and liquidated last year. Sports Authority was once the largest sporting goods chain in the U.S., but it was hobbled by mounting debt, weak e-commerce returns and failures to meet increasing challenges in the space. Dick’s Sporting Goods acquired its intellectual property and many of its stores. 

Eastern Outfitters, which filed for bankruptcy in February, is just the latest retail company owned by a private equity group to run into trouble. The Limited, owned by Sun Capital, recently shut down, while J. Crew, owned by TPG Capital LP and Leonard Green & Partners L.P., in February sued its lenders, alleging that they were interfering with its restructuring plans.