Dick’s Sporting Goods took another step to become the dominant player within sporting goods retailing, submitting a bid for 17 Sports Authority stores, according to Reuters. Sports Authority’s future has been embroiled in uncertainty since filing for Chapter 11 bankruptcy in March and then liquidating its 450+ stores after failing to agree with creditors on a reorganization plan.
The auction for Sports Authority’s assets will take place June 29, with 320 of the retailer’s stores up for grabs.
Initial bids for the stores were due on the evening of June 23. The Reuters report revealed that:
Stores with no bidders will likely be shuttered;
Other unnamed retailers made offers, but only for single locations; and
Bids for Sports Authority’s intellectual property are not due until the evening of June 27.
Little Appetite For Brick-And-Mortar Locations
Dick’s, the top competitor to Sports Authority within the sporting goods market, had been rumored to have interest in purchasing both the brand’s stores and its intellectual property since the bankruptcy filing. Camilo Lyon, an analyst at investment banking firm Canaccord Genuity, wrote in a research note in May that Dick’s was likely to scoop up 80 Sports Authority stores, but could acquire as many as 180.
While Dick’s ended up placing its own bid, its interest in only 17 stores pales in comparison to previous estimates. Furthermore, it appears other competitors with potential interest have opted to stay away from the Sports Authority stores completely. Although Modell’s Sporting Goods and Sports Direct were in talks to make a joint bid on as many as 200 Sports Authority stores, the parties did not submit a bid by the June 23 deadline. Academy Sports + Outdoors also balked despite now being a leading pure sporting goods competitor of Dick’s.
The lack of interest in the stores by any of the parties thus far, even Dick’s, may indicate that these retailers simply don’t see the extra store space as being worth the price to acquire. With Sport Chalet also shuttering all its stores and its e-Commerce site, the brick-and-mortar blues haven’t been exclusive to Sports Authority, perhaps contributing to the hesitation from the rest of the major sporting goods players.
As the intellectual property bidding deadline looms, with assets such as the brand’s naming rights, private label brands, online domain names and transaction databases all being made available, the results of the auction will give better insight into where the Sports Authority brand’s value lies going ahead.