Sports Authority Files For Bankruptcy

Posted: Mar 2 2016, 7:27pm CST | by , in News | Latest Business News


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Sports Authority Files for Bankruptcy
Photo Credit: Getty Images

Sports Authority was once the world's large sports retailer, and this week they announced that they are filing for Chapter 11 bankruptcy and closing nearly a third (140) stores during the next three months.

The sporting goods retailer long struggled to keep their shopping experience up to date against some of the newer retailers like Dick's Sporting Goods or Cabela's, both of which offer more immersive experiences.

“In retail, you can’t just leave all the stores alone forever,” said Paul Swinand, a retail analyst to the Washington Post. “You have to constantly reevaluate your stores or else they get old. If you don’t see changes coming and you let that go for too long, you end up with tired stores and tired customers and brands that don’t want to give you their best product.”

Chief executive Michael Foss wrote an open and candid letter to customers, discussing some of the challenges that go along with keeping a retail environment up to date. However, he remained hopeful that the bankruptcy would allow them to come back stronger than ever with upgraded stores and an updated website.

“This was a tough decision to make, but we believe it was a necessary step in our plan to make Sports Authority an even better partner for our customers,” Foss wrote.

Based in Englewood, Colorado, the company employed over 16,000 people and made $3.5 billion last year, but that wasn't enough. Sports Authority disclosed $1 billion in liabilities in its petition and between $500 million and $1 billion in assets.

It was in the mid-2000s when the company started tail spinning thanks to competitors. In January, they missed a $20 million debt payment.

“They haven’t been in a good position competitively for a while,” said Charles Lindsey, associate professor of management at the State University of New York at Buffalo.

Swinand agreed and cited unpredictable weather all over the map and online sales as big causes for why shoppers may have dropped.

“It sounds like Monday morning quarterbacking,” he said, “but in my mind they had tired stores, and Dick’s just has better brands, better stores and a better shopping experience.

Sports Authority is the latest of 90s superstores to file for bankruptcy, following in the path of Circuit City, Borders, and RadioShack.

The company hasn't announced which stores will close yet, though it is likely that many will be in California. The company assures that all credit cards, gift cards, and loyalty programs will stay intact.

One place they could cut costs is by selling their naming rights to the Denver Broncos' stadium, which they bought in 2011 and can keep until 2035. It pays $6 million a year for that right.

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<a href="/latest_stories/all/all/46" rel="author">Noel Diem</a>
Noel passion is to write about geek culture.




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