Apr 15, 2016
Dick's, Academy Sports eye Sports Authority assets
Apr 15, 2016
Academy Sports + Outdoors and Dick's Sporting Goods Inc have expressed interest in buying the assets of rival U.S. retailer Sports Authority Inc that are on sale in a bankruptcy auction, according to people familiar with the matter.
The auction will determine whether Sports Authority, which opened its first store in Florida in 1987 and expanded nationwide, will be sold off in pieces, or its creditors will hold on to it and try to find a buyer for its entirety.
Both Dick's and Academy Sports have submitted letters of interest to buy some of the assets of Sports Authority, which filed for Chapter 11 bankruptcy in March after seeing sales flatline in the face of online competition, the people said this week.
New York City-based Modell's Sporting Goods is also interested in Sports Authority, which has 464 stores across the country, the people said. But family-owned Modell's, whose stronghold is on the U.S. East Coast, has not yet decided whether it will participate in the auction, the people added.
Dick's, Academy Sports and Modell's are jockeying for position as the sporting goods industry sees increased competition from new entrants such as Wal-Mart Stores Inc, Amazon.com Inc and branded athletic apparel companies such as Lululemon Athletica Inc.
Sports Authority declined to comment. Spokespeople for Academy Sports, Dick's and Modell's did not respond to requests for comment.
Englewood, Colorado-based Sports Authority on Thursday gained approval from a judge to extend the deadline for bids into late May. The bulk of Sports Authority's assets, from its stores to its intellectual property and website, are on the block.
Sports Authority, in court papers, said it intensified efforts to find a buyer for the entire business as a going concern immediately after it missed a crucial interest payment in January.
No one came forward with a final proposal before the bankruptcy filing, despite what Sports Authority described as "strong interest."
Dick's leads the U.S. sporting goods industry with 600 stores and a roughly 15 percent market share. The Coraopolis, Pennsylvania-based company has been on an expansion kick, opening roughly 200 locations over the past five years.
Katy, Texas-based Academy Sports, owned by buyout firm KKR & Co LP, is also looking to expand further into the Midwest and South from its base in the southeastern United States.
Sports Authority is owned by private equity firm Leonard Green & Partners LP, which bought it in 2006 for $1.3 billion. It has more than $1.1 billion in debt.
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