Sports Authority to close after all
The Sports Authority, which repeatedly picked itself up from the canvas during two months in U.S. Bankruptcy Court, has gone down for the count.
The troubled Englewood, Colo.-based sporting goods retailer's assets were sold at auction this week to a group of liquidation firms. According to Delaware U.S. Bankruptcy court filings, going-out-of-business sales will commence soon, including the Rogue Valley Mall location, and continue until Aug. 31.
Tiger Capital Group, Hilco Global and Gordon Brothers submitted a winning bid of 101 percent of the cost of Sports Authority Holdings Inc.’s assets. The winning group agreed to also pay a $1.8 million guarantee.
But as one company fades into memory, another is nearing arrival in Southern Oregon.
Rival Dick's Sporting Goods couldn't have timed things much better. Construction of the 89,000-square-foot Dick's Sporting Goods and Field & Stream store is barreling along at Northgate Marketplace with designs for opening in time for the holiday shopping season.
"There is lot of activity in the sporting goods landscape right now," Dick's Sporting Goods CEO Ed Stack said during a Thursday conference call. "The long-awaited consolidation is taking place. Over the past several months, City Sports in Boston is liquidated, Sport Chalet has announced the closing of all of their stores, the Sports Authority is in the midst of liquidating and closing their 400-plus stores, and others are evaluating strategic alternatives. Although it’s a mess, it’s a great opportunity for Dick’s Sporting Goods."
The Wall Street Journal reported other offers ahead of the auction came from competitors Modell’s Inc. and Dick’s Sporting Goods, each seeking a small number of stores. An auction for Sports Authority's store leases will be held at a later date. On Tuesday, Coraopolis, Pa.-based Dick’s increased the number of stores on which it would bid to about 30 locations, people familiar with the matter said.
In the end, however, it wasn't competitors, but liquidators sweeping up Sports Authority's inventory.
With more than 200 Sports Authority stores located within five miles of Dick's operations and 350 within 10 miles, Stack said there would be a short-term impact on sales. He said he expected Sports Authority’s liquidation to continue past this Father’s Day and virtually all of the back-to-school selling period.
"This is going to have a short-term impact but it does provide us a great opportunity going forward," Stack said. "It’s clear that we’re the winners in this race between us and Sports Authority and Sport Chalet. And we’re very happy of the position we’re in right now."
Sports Authority was founded in Fort Lauderdale, Fla., 29 years ago and acquired by Kmart in 1990. In 2006, the company was bought by Los Angeles-based private equity firm Leonard Green & Partners, which saddled the retailer with a $1.1 billion in debt. In January, Sports Authority missed a $21 million interest payment on its remaining $643 million in debt, which led it to bankruptcy.
The Colorado-based retailer, once the largest sporting-goods chain in the country with stores in 41 states and Puerto Rico, filed for Chapter 11 court protection in March with the hope of restructuring. But the retailer was unable to reach an agreement with creditors and lenders.