What does the retailer’s demise mean for other sporting goods dealers – and the Denver Broncos?
A few months after filing for bankruptcy protection, Sports Authority has announced it is liquidating its assets, a move that could shutter all of its 463 stores.
Under its March Chapter 11 filing, the sporting goods retailer planned to close 140 stores but leave the rest open. However, faced with more than $1 billion in debt, the chain recently notified a federal bankruptcy court in Delaware that it would not be able to reorganize and instead would move ahead with a sale. An auction is scheduled for May 16.
Company officials said they have received “initial expressions of interest from a number of potential buyers’’ and, depending on the outcome of the sale, some stores could remain open or all of them could be liquidated.
The Englewood, Colo.-based retailer had about 14,500 employees at the time of its bankruptcy filing. Once the nation’s largest sporting goods retailer, it has struggled in recent years amid tough competition from other brick-and-mortar stores and online retailers.
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Sports Authority’s demise could prove beneficial to standout brands such as Dick’s Sporting Goods and REI, competitors with successful business strategies and strong leveraging power with suppliers. Dick’s, with its huge national footprint and wide range of merchandise, has added 200 stores in the past five years. REI has carved out a niche focused on customer experience.
Dick’s has emerged as a potential buyer for some of the Sports Authority stores, a scenario that would still likely result in many store closures as more sporting goods sales shift online.
Also uncertain is the fate of Sports Authority’s naming rights to the Denver Broncos’ stadium. The company acquired the naming rights to Sports Authority Field at Mile High in 2011 in a 25-year agreement worth $6 million a year.
If the chain is sold and the Sports Authority’s stadium contract is broken, any decision to rename the field would be up to the Denver Broncos and the Metropolitan Football Stadium District. The Sports Authority has kept up with payments since the March bankruptcy but the next payment, for $3.6 million, is due Aug. 1.
