One sporting goods retailer’s bad fortune may be to a longtime competitor’s benefit.
Bloomberg reports that Sports Authority — as it prepares to file for bankruptcy — is rumored to be in discussions with rival sporting goods chain Dick’s (and other companies) about purchasing the once-flourishing retailer’s stores and intellectual property.
According to sources who spoke on the condition of anonymity to Bloomberg, Modell’s Sporting Goods is — along with Dick’s — also in the mix as a possible candidate to buy some Sports Authority stores.
Bloomberg also points out that Sports Authority was, at one time, the largest sporting goods retail chain in the United States, a far cry from the position it finds itself in presently: facing at least $643 million in debt and having discussions with lenders about filing for Chapter 11, a plan which, according to Bloomberg’s sources, could involve closing as many as 200 of its 450 locations.
On the other end of the sporting goods retail spectrum, the outlet highlights the fact that Dick’s — which struggled to gain traction back in the days when Sports Authority was rising to the top, then eventually matched its pace (on the way to surpassing it) — has seen its stock rise 22 percent this year.
The Bloomberg story posits that acquiring its one-time rival could benefit Dick’s in a couple of ways — either by expanding its own reach by operating the former Sports Authority locations under its own brand or simply by closing them down and narrowing the playing field in the sporting goods industry.