You will be redirected back to your article in seconds

Why Sports Authority’s Bankruptcy Isn’t Done Wreaking Havoc on the Industry Yet

It’s been nearly a year since former sporting goods heavy hitter Sports Authority filed for Chapter 11, but it’s impact on the industry remains palpable.

Canaccord Genuity Inc. analyst Camilo Lyon said Monday that disruption stemming from the sporting goods bankruptcies — Sport Chalet, Bob’s Stores and Eastern Mountain Sports owner Vestis Retail Group LLC also filed for Chapter 11 last year — is dragging on much longer than anticipated.

The Sports Authority’s bankruptcy has left sales that we believe have not yet found a home in the channel,” Lyon wrote Monday. “We suspect it will take another two quarters for a (near) complete realization of the $2.6 billion in annual sales to materialize via other channels.”

When Sports Authority announced last May that it abandoned its initial restructuring plans and would close all of its stores, industry chatter surmised that Dick’s Sporting Goods as well as smaller sporting goods player Modell’s would snap up the firm’s abandoned market share. But Lyon and other analysts now say that some customers are lagging when it comes to making the shift to Sports Authority’s competitors, stunting overall growth in the sporting goods channel.

For example: Market research firm The NPD Group said its December footwear revenues data showed soft sales in the athletic specialty and sporting goods channel — a fact that the company is also partly attributing to Sports Authority’s demise.

Sales in that channel were down in the low single digits, dragging down the overall market,” NPD sports-industry analyst Matt Powell said. “Those soft sales were primarily caused by the absence of The Sports Authority — nowhere was this void felt more than in running footwear, which declined 8 percent.”

The number of customers who may eventually fall off the sporting goods bandwagon altogether with Sports Authority now off the radar is also a major concern.

For now, Dick’s Sporting Goods — which snapped up 31 former Sports Authority stores as well as the retailer’s intellectual property — is working to infiltrate markets where Sports Authority had a presence. When those efforts are in full effect, experts believe it could drum up more growth in the channel.

More From Our Brands

Access exclusive content