Sportswear retailer Sports Authority is preparing to close 140 to as many as 250 of its 450 stores nationwide, including all of its 25 stores in Texas, the Denver Post reports.
The paper also reports that the struggling retailer missed a $21 million interest payment in January and has laid off 100 employees at its Englewood, CO, headquarters. Sources have told Bloomberg that the company is in the midst of negotiating with bondholders in an effort to avoid Chapter 11 bankruptcy.
Many are questioning the retailer’s deal to keep naming rights to Denver's “Mile High Stadium,” an arrangement that has cost the company $6 million a year, with at least four more years to go, according to the Metropolitan Football Stadium District.
Sports Authority appears to be buckling under the pressure of an increasingly competitive sports apparel and gear retail environment, plus a crippling debt load made worse by its stadium-naming deal. Pressure to discount in the face of tough competition and mounting costs, including that stadium-rights deal, have hobbled the once-promising retailer.
In 2006, when the retailer was acquired by private equity firm Leonard Green & Partners LP for $1.3 billion, its future was bright. But competition in the space has intensified and morphed. There's now a newfound appreciation for women’s fitness and a strong "athleisure" market, plus assertive moves by retailers as diverse as Dick’s Sporting Goods, Lululemon Ahtletica Inc. and Gap’s Athleta, and discount retailers like Target, and Amazon.