Dick’s poised to take advantage of Sports Authority woes
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Dick’s Sporting Goods could be poised to take advantage of the financial troubles of one of its biggest rivals.
Following the widely expected news that Sports Authority had filed for bankruptcy protection and was closing 140 of its 463 stores across the US, Dick’s CEO, Ed Stack, left the door open for his company to take over some of the outlets. Between 90 and 100 soon-to-be-closed Sports Authority stores directly overlap with those of Dick’s Sporting Goods.
Stack told analysts during the company’s fourth-quarter conference call yesterday that he saw opportunities amid the changing sporting goods retail landscape, especially with Sports Authority’s troubles.
Although he said it was too early to talk specifics, Stack told the Pittsburgh Business Times that whether Dick’s moved on Sports Authority stores would depend on where the stores are located, how long the leases have remaining and potential options, along with projections on sales and profitability.
“We have got to do a deep analysis as to what is associated with those leases,” he said.
In a letter to customers, Michael E. Foss, CEO of Sports Authority, explained that the company was committed to remaining in business and adapting to better meet the needs of its customers.
“Due to the changing retail environment we have a long-term plan to streamline and strengthen our business so we can make the necessary investments in our operations, including upgrading our store experience and enhancing our website.
“As part of the plan we have identified approximately 140 stores that we intend to close in the coming months. This was a tough decision to make, but we believe it is a necessary step in our plan to make Sports Authority an even better partner for our customers. The closures will happen over the next three months.”
• Dick’s Sporting Goods blamed unseasonably warm weather for a 2.5% decrease in same-store fourth quarter sales. However, the retail chain announced that it was to invest between $50 million and $55 million in 2016 to improve its shopping experience, build the brand equity and transition to its eCommerce business.
Net sales for the 52 weeks ended January 30th, 2016 increased 6.7% from last year’s period to $7.3 billion, reflecting the opening of new stores, partially offset by a consolidated same-store sales decrease of 0.2%.