There's more bad news in the sporting goods vertical, even as Sports Authority has managed to push back the date for a planned bankruptcy auction to May. The delay request comes as rival sporting goods players Academy Sports + Outdoors, Dick’s and Modell’s have all expressed interest in purchasing the retailer’s assets.
The auction, which was initially scheduled for this month, will decide whether the retailer is sold off in pieces or as a whole to a new bidder. Sports Authority has already committed to closing approximately 140 of its 450 stores in the wake of its Chapter 11 filing.
Like Sports Authority, Sport Chalet was not getting the returns it had hoped for out of its e-Commerce offerings. In a market where Amazon and Walmart are now big players in the sporting goods space, Sport Chalet appeared to be falling out of favor with consumers.
Aside from the evolution of the model, there simply may not be room for more than two or three major sporting goods players in the current marketplace. A report from financial advisory firm Gordon Brothers Group noted that U.S. consumer spending on nondurable goods — typically an indicator of sporting goods sales — decreased 3% year-over-year in May 2015. Among children aged six to 17, the average number of team sports played per participant declined 5.9% from 2009 to 2014, perhaps showing that the market for sporting goods is shrinking as fewer youths see the need to buy these products.
In preparation for the bankruptcy filing, Sport Chalet locations began holding closing sales on April 16. Vestis Group is also closing eight EMS stores and one Bob's Store. While all Sport Chalet stores will remain open for the next several weeks during the sales, the retailer is no longer selling merchandise on its e-Commerce site.
To achieve its financial objectives, Vestis initiated voluntary reorganization proceedings under a Chapter 11 bankruptcy petition. Vestis expects to sell EMS and Bob’s to funds advised by parent company Versa Capital Management by mid-summer, according to the petition. The petition noted that while the retailer had as much as $500 million in liabilities, it had less than $50,000 in assets.
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