Just two months after filing for Chapter 11 bankruptcy, Sports Authority is closing up shop, shuttering all 450-plus of its stores across the nation.
The Colorado-based sporting goods company — once the largest sporting goods store chain in the United States — initially planned to restructure and close a limited number of stores as it struggled to compete with other mainstream retailers and online merchants.
But according to the Los Angeles Times, Sports Authority was unable to reach an agreement with its creditors and lenders.
Instead, Sports Authority found itself on the auction block where liquidators outbid competitors for the stores and will take control of its assets. Sporting goods store competitors Dick’s Sporting Goods Inc. and Modell’s Inc. each put in offers for small groups of the stores. The LA Times said the company’s store leases will be sold at a later time.
For consumers, the silver lining to the stores’ closing is the going-out-of-business sales that typically follow such an announcement, Consumerist reports. You can expect to see big sales starting as early as Memorial Day weekend and ending about Aug. 31, according to this bankruptcy document.
So if you need to purchase any sports equipment — from soccer cleats to running gear to a fishing pole — you won’t want to miss the Sports Authority liquidation sales. Says Consumerist:
You’ll see familiar faces in the store, since at least at first the liquidators will hire current employees to run the store while it closes. At first, you’ll generally see merchandise marked up to its full retail value, which is not necessarily what you would have paid before the liquidation sale. Then the markdowns begin, ending when there’s nothing left but dregs from the warehouse for 90 percent off, and the shelves and fixtures are for sale.
The LA Times said Sports Authority reported $3.5 billion in revenue for 2015. The chain employs roughly 16,000 people.
One company’s demise may help another reap more profits from shoppers. For instance, Sports Authority competitor Dick’s Sporting Goods is in a good position to attract former Sports Authority shoppers, especially when you consider that Dick’s estimates that there are roughly 200 Sports Authority stores within five miles of a Dick’s — and 350 stores within 10 miles of one.
Dick’s Sporting Goods CEO Ed Stack told The Street that as Sports Authority and regional sporting goods store Sports Chalet both sell off their merchandise for cheap and close their doors for good, they’re leaving the sportswear market in turmoil.
“The long-awaited consolidation in the sporting goods market is happening — but right now it’s a mess,” Stack said on a call with analysts Thursday.
The Street noted that liquidation sales at Sports Authority and Sports Chalet will create “a short-term headwind for Dick’s Sporting Goods as consumers try to score amazing deals on sporting goods.”
According to the Denver Business Journal, there is still one big unresolved issue in the Sports Authority bankruptcy and liquidation: the Denver Broncos’ stadium, named Sports Authority Field at Mile High.
The Broncos are concerned that Sports Authority may be attempting to sell off its naming rights to the stadium without getting their authorization.
“The Metropolitan Football Stadium District, which owns the stadium, argued in filings in Sports Authority’s bankruptcy case that the stadium naming-rights contract can’t be sold off without its permission,” the Journal explained.
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