Sports Authority Going Bankrupt
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As of Wednesday, March 2nd, Sports Authority, the fourth-largest U.S. sporting goods chain had filed for bankruptcy. While they announced that they would be closing up to 140 current stores, it was no surprise as Sport Authority has had a debt under the radar since January.
This resulted from a missed $20 million dollar debt payment due to changing trends, and the retailer’s ignorance to change to consumer tastes. The retailer based in Englewood, Colorado will be closing almost a third of its stores in the next 3 months.
It is still unknown to which locations will be closed. A large majority of their 14,500 employees will be laid-off as they start to shut down their stores and their offices across the States. According to the bankruptcy filing, more than 1 billion dollars in assets and liabilities are at stake as they try to save the business.
Sports Authority has also taken out a loan of nearly 600 million dollars in attempts to salvage what’s left. After the majority of the business closes down, this money will be used to fund the remaining stores of the business in attempts to try and rebuild, rebrand, and restore.
As of now, the business has stated that they would want to convert to a smaller business model and maintain their business in a smaller manner. The biggest challenge they face at the moment is finding a buyer to take over all the stores they wish to sell; this way they can get out of bankruptcy and pay off the debt of 600 million dollars.
One of the most well known sporting goods stores is now pulling all their stores and will no longer be in the top ranks for the niche. This may also pose the question if Cherry Creek High School will remain affiliated with Sports Authority as all of our nike gear for Creek sports come from our relationship with sports authority.
In addition to that, Sports Authority used to spend 6 million dollars a year promoting themselves in the stadium housing the recent winners of the Super Bowl, the Denver Broncos. Having such a well known brand struggle and fall puts things into new perspective. There will always be shoppers who seek a person to person shopping experience in a brick and mortar store. However, Sports authority is only the latest retailer to undergo massive loss and cut downs. More and more standing stores are having to close their physical business and move online. With so much online competition, it can be difficult for businesses to survive with that alone. This year, we can probably expect to see them sparsely scattered around with a larger presence online.