U.S. retailer Sports Authority has filed for bankruptcy, and will be closing stores, as it faces heavy competition in a space it once dominated. Bobbi Rebell reports.
Sports Authority filing for bankruptcy. The sporting goods retailer has hired liquidators to begin store closing sales at up to 200 of its 463 locations. The goal: rightsize the company and focus on the more profitable stores. The once top U.S. sporting goods retailer has struggled to compete with formidable rival Dicks Sporting goods, as well as retailers like Wal-Mart and Target. And, of course, online competition led by Amazon. Adding to the pain - a huge debt load. The company listed liabilities of up to $10 billion and assets of up to $1 billion in court documents. Sports Authority was bought by private equity firm Leonard Green back in 2006 for $1.3 billion. Lawrence Perkins is the CEO of SierraConstellation Partners, which specializes in retail reorganizations: (SOUNDBITE) LAWRENCE PERKINS, CEO, SIERRACONSTELLATION PARTNERS (ENGLISH) SAYING: "They have less flexibility because of the debt that is out there, and, I think, it's the better part of a billion dollars of debt on the company, and you just don't have the nimbleness that you have when you are that levered. So, I think, compounded with a difficult retail environment, it's just really hard to execute when you have that albatross around your neck." Sports Authority joins a growing list of retailers, including Wet Seal and RadioShack trying to slim down their business, as more consumers spend their money online.