Sports Direct on Wednesday announced that its acquisition of U.S. sports retailers Bob’s Stores and Eastern Mountain Sports is complete, according to a company press release.
In coming months, the U.K. sports retailer will expand product lines available in the U.S. stores and websites, including the U.S. debut of an extensive portfolio of European brands. Sports Direct will honor gift cards and un-expired member rewards that pre-dated the acquisition, and, in the future will enhance the member rewards program with member-only offers, the company said.
The company will initially operate some 50 brick and mortar stores in the Northeastern U.S., five EMS outdoor adventure schools and the websites ems.com and bobstores.com.
In April, Sports Direct landed the approval of the Delaware Bankruptcy Court to acquire certain assets of Eastern Outfitters LLC, including the Bob's Stores and Eastern Mountain Sports businesses, for $101 million in cash, marking its entry into the U.S. About that time, the company also acquired a 7.9% stake in The Finish Line Inc. through shares bought between March 30 and April 13, an interest that makes Sports Direct the fifth-largest shareholder of Finish Line.
Sports Direct is the U.K.’s largest sporting goods retailer, operating almost 800 stores across the U.K., continental Europe and Asia. The company also operates premium lifestyle and outdoor divisions and owns a portfolio of more than 30 globally recognized brands, including Slazenger, Everlast, Lonsdale, Karrimor, No Fear and Kangol. In a statement, a company spokesperson said the acquisition will allow the company to rapidly expand its store and web presence in a "critically important market."
Last year, Eastern Outfitters' previous owner, Vestis Retail Group, shuttered regional sports retailer Sport Chalet in order to focus on its Bob’s and Eastern Mountain Sports operations, and it ultimately sold those retailers to Versa Capital Management. At the time, Eastern Outfitters had more than $400 million in annual revenue, but its financial stability didn't last.
Fierce competition in the sporting goods space has taken its toll on many players in the sector — felling Sports Authority, which filed for bankruptcy and liquidated last year. Sports Authority was once the largest sporting goods chain in the U.S., but it was hobbled by mounting debt, weak e-commerce returns and failures to meet increasing challenges in the space. Dick’s Sporting Goods acquired its intellectual property and many of its stores.
Eastern Outfitters, which filed for bankruptcy in February, is just the latest retail company owned by a private equity group to run into trouble. The Limited, owned by Sun Capital, recently shut down, while J. Crew, owned by TPG Capital LP and Leonard Green & Partners L.P., in February sued its lenders, alleging that they were interfering with its restructuring plans.