Updated: Dick’s Confirms Successful Sports Authority Bid
Dick’s Sporting Goods Inc. confirmed via a filing with the U.S. Securities and Exchange Commission on Thursday that it successfully bid on Sports Authority’s intellectually property assets and the right to acquire 31 store leases.
Dick’s said it has agreed to pay $15 million for the intellectual property assets and $8 million plus cure costs for the right to acquire the store leases. Intellectual property assets include the name The Sports Authority, the retailer’s domain names, owned trademarks and customer information. The naming rights for the Sports Authority Field at Mile High are not included in the intellectual property assets to be acquired by Dick’s.
Coraopolis, Pa.-based Dick’s said it now has “a period of time” to determine whether it will accept or reject any particular Sports Authority store lease, “thus providing the company time and optionality to determine which [Sports Authority] store locations it will ultimately assume.”
The bankruptcy court’s hearing to consider approval of the sales is scheduled for July 15.
What We Reported Earlier
Dick’s Sporting Goods Inc. successfully nabbed bankrupt retailer Sports Authority’s brand name and other intellectual property at a bankruptcy auction Wednesday, The Wall Street Journal reports.
The sporting goods retailer reportedly outbid U.K.-based Sports Direct International PLC to pay $15 million for the intellectual goods.
Contrary to prior reports, which suggested that it was no longer possible for firms to bid on brick-and-mortar stores, Dick’s was also able to secure 31 Sports Authority leases for $8 million, according to the WSJ.
Last week, the WSJ reported Sports Direct and Modell’s Sporting Goods were in talks about a potential deal to acquire as many as 200 Sports Authority stores, but those talks did not materialize before a June 23 deadline.
That news had followed months of speculation regarding who — if anyone at all — might snap up some of bankrupt Sports Authority’s stores as the retailer liquidates all of its 463 doors.
Once a leading sporting-goods retailer, Sports Authority filed for Chapter 11 protection in March — yielding under the weight of hefty real estate costs, increased e-commerce competition and the rise of other sporting goods retailers such as Dick’s Sporting Goods and Modell’s.
Athletic brands — including Under Armour, which lowered its fiscal outlook earlier this year after Sports Authority confirmed it would shutter all doors — have been feeling the impact of Sports Authority’s demise.
Meanwhile, experts have said that Dick’s, Modell’s and other sporting good retailers stand to gain from the bankruptcy in the long run.
In the near term, however, heavy liquidation sales at Sports Authority have actually hurt some sporting-goods sellers.