Sports Authority Declares Bankruptcy!

[FloridaFishinFool]

I guess we might finally see some decent sales! Something to get us "in the door."

Sports Authority is bankrupt

and closing 140 stores

by Chris Isidore  March 2, 2016: 12:40 PM ET

Sports Authority filed for bankruptcy early Wednesday and said it will close 140 stores, nearly a third of its total.

The bankruptcy has been looming since January, when the company disclosed that it had missed a $20 million

debt payment.

The store closings will take place over the next three months. The stores to be closed have yet to be disclosed.

The bankruptcy filing will allow it to break leases for money-losing stores.

The company has 14,500 full- and part-time employees at its 450 stores and its offices, according to the

bankruptcy filing. Nearly two-thirds of those workers are part-time. It also disclosed more than $1 billion in

liabilities and assets valued between $500,000 and $1 billion.

"In terms of their long-term viability, I think they need to do more than just close stores," said Andrew Bove,

credit analyst with Standard & Poors. "There's other issues. They're not doing enough to get consumers

in the door to spend money."

The company has arranged to borrow up to $595 million to fund its operations while in bankruptcy. But to

pay off that loan and come out of bankruptcy, it likely will have to find a buyer for the remaining stores.

That will be a challenge, Bove said, but not impossible.

"It's a well-known brand. They were the leader in the industry, so there is some value there," he said.

When the company was bought by a hedge fund 10 years ago, it was the largest sporting goods retailer.

But it has struggled with the debt load associated with a leveraged buyout a decade ago. It has been

overtaken by Dick's Sporting Goods (DKS), which has grown by providing a more high end shopping experience.

"Someone who wants to shop in a brick-and-mortar store and try on the baseball glove, or get the feel

of a golf club, wants a better shopping experience," said Larry Perkins, of SierraConstellation Partners,

an expert in retail reorganizations. "That's not Sports Authority any more."

Sports Authority is just the latest retail giant to fall on hard times as more and more shopping moves online.

Circuit City went bankrupt in 2008, followed by Borders in 2011. Both eventually closed. RadioShack

went bankrupt a year ago, and American Apparel (APPCQ) filed in October, although both companies

remain in business with fewer stores.

Store closings are a growing trend among troubled retailers not in bankruptcy, such as Sears(SHLD).

Even successful retailers such as Walmart (WMT) are closing stores.

For Sports Authority, the online competition has come from online retailers such as Amazon (AMZN,Tech30) 

and Fanatics, and also retail sites run by sports leagues such as the NFL and NBA.

"You used to go to Sports Authority or some other store to buy your fan gear. Now it's much easier

to find online," said Perkins.

Sports Authority spends $6 million a year to have its name on the stadium that is home to the

Denver Broncos, which just won the Super Bowl. Whether that 25-year naming rights deal will

continue under the bankruptcy is unclear.

"This was a tough decision to make, but we believe it was a necessary step in our plan to make

Sports Authority an even better partner for our customers," said CEO Michael Foss.

Correction: An earlier version of this story incorrectly stated the day of the filing and the

amount of assets reported by Sports Authority.

[AQUA VELVA]

They used to have a pretty good fishing dept.some years ago. Spent a lot of money there when I was getting back into the sport. Haven't been in one in a long time.

[atcoha]

ours closed a few years ago, turned into a gander...and their "bass" dept. is about as bad as the local post office.

But they do have a GREAT selection for salt/inshore.

[Buckeye Ron]

None around me so I've never been to one. Hate that so many jobs are being jeopardized.

[FloridaFishinFool]

I never really liked their prices. I thought they were too high, and they whittled down the size of their fishing dept's. to next to nothing in some stores.

It seemed like to me fishing was not a big part of what they do. I would walk into a store and see everything else like sporting clothing and gear for more popular sports like football, soccer, baseball, running, and kayak'ing etc. and fishing seemed kind of pushed down and pushed back to the back of the store and made smaller.

Usually about the only items I would be interested in were clearance items marked down.

And honestly I am not getting my hopes up of finding any really good deals in stores that are closing. I would expect them to shuffle the inventory to other stores in an effort for them to not take any- or much- losses during liquidation.

[quanjig]

Had a few close around where I live, found calcutta B150 for $89. Should have gone around to as many as I could for that price!!

[Jtrout]

All the ones near me stopped selling fishing stuff years ago dont have a reason to go in there any more lol

[Steveo-1969]

23 hours ago, AQUA VELVA said:

They used to have a pretty good fishing dept.some years ago. Spent a lot of money there when I was getting back into the sport. Haven't been in one in a long time.

Sounds like we have found the cause of the bankruptcy!!!  j/k

[AQUA VELVA]

I take full responsibility, Stevo.

[Jrob78]

23 hours ago, Jtrout said:

All the ones near me stopped selling fishing stuff years ago dont have a reason to go in there any more lol

Same here.

[bigbill]

I don't think there fishing department isn't today what it was decades ago.

[Darren.]

I've not been in the store down in Hampton, VA 
for years. Sorry to hear they've gone the bankruptcy
route, but in the face of Bass Pro and DSG's, it may
be a tough retail road to hoe, as they say.

[BassinLou]

All the SA's in my area stop selling fishing stuff a couple of years back. 

[buzzed bait]

like the other stores mentioned in the article, they refused to change with the retail landscape and they get swallowed whole...  

[South FLA]

It's a sign of the times,  people browse box stores and then buy it online, tough to compete against that.  

[Sam]

I am interested as to why their store sales have not exceeded their overhead.

The management has the statistics on sales from different departments and they can tell which sections of their stores at each location do well and do poorly.

Also, retail is about location, location, location. Long term leases keep a retailer from relocating their stores to better locations based on the demographics of an area. For example, in Richmond, Virginia, the middle and high class population is moving to an area west of the city known as Short Pump. This is where Cabela's will be opening their new store. Only other local sports oriented competitor is Dick's in the Short Pump mall and Dick's can't compare to Cabela's for fishing, hunting, clothing, boats and general merchandise other than athletic/team equipment.

Over expansion; poor store management; poor forecasting of sales; demographic changes; not keeping up with product changes; and stockholders pressure can cause a large and powerful chain to fail. Look at K-Mart. Once a retail powerhouse. Not any more.

Yes, it is a shame to see one of our largest sports retailers have to protect itself under the bankruptcy laws. On the other hand, bankruptcy may be the only way the company can extradite itself from its long term rental leases for unproductive stores and move into the areas where their target population lives and shops.

Stay tuned. The story has just started.

[bigbill]

Sounds like more business savvy than knowing sports. You have to know each sport. Where's it headed in the market. You need a vision into the future. You need to stay on the edge of the market.

[RAMBLER]

The closest one to me is at least 80 miles from saltwater and that is just about all the fishing gear that they stocked.  Only went in there a couple of times and see no reason to ever go back or be concerned if they close up.