Sports Authority plans to shutter its Denver distribution warehouse by April 29 and let 72 workers go as it reportedly prepares for bankruptcy.
The retail giant filed a Worker Adjustment and Retraining Notification Act notice indicating plans to close its distribution center at 50 S. Kalamath St. in Denver. The company will close a warehouse and distribution center in Illinois, a source familiar with the company’s plans told The Denver Post Friday.
The 200,000-square-foot Denver warehouse could be a prime condidate for redevelopment, Dave Hagan, the property’s owner, told Business Den, which first reported the shutdown.
Sports Authority is struggling under a high debt load and missed a $21 million interest payment in January, which put the retailer in technical default, according to Moody’s Investment Services, which continues to downgrade the retailer.
Just weeks after skipping the payment, about 100 employees were laid off, mostly at Sports Authority’s Englewood headquarters. The cuts included the company’s team sales division, which sells equipment to youth, high school and college sports teams.
Analysts and bankers have said that bankruptcy could be a viable option for Sports Authority, which sources say is in negotiation with its lenders. The company faces heavy competition from Dick’s Sporting Goods and online retailers such as Amazon.com and is looking for ways to save costs and pare back its 450 locations.
The company began clearance sales at three of its Colorado stores slated for closure — the Denver Sports Castle at 1000 Broadway, and the Arapahoe store at 9000 E. Peakview Ave. in Greenwood Village, and the S.A. Elite at Twenty Ninth Street mall in Boulder. A source with knowledge of the talks told the Post last week that Sports Authority is targeting about 140 stores for closure.
As part of Sports Authority’s efforts to streamline costs and close stores, the company evaluated its operations base, the source said. The company decided to close distribution centers and warehouses in Colorado and Illinois, while keeping centers operational in California, Georgia and New Jersey, the source said.
In 2003, Gart Sports, the venerable Colorado sporting goods company, merged with Florida-based Sports Authority. The $500 million deal combined the two publicly traded companies under Sports Authority’s flag at Gart Sports’ headquarters in Englewood.
Three years later, a Leonard Green & Partners-led group snapped up Sports Authority for $1.3 billion, taking it private in the process.
In the past decade, Sports Authority has grown in the U.S. and Puerto Rico while also taking on a 20-year, $60 million naming-rights deal to replace Invesco as the sponsor of Mile High Stadium, the Denver Broncos’ home field.
The next stadium payment of $3.6 million is due on Aug. 1.
Sports Authority has not missed or been late on those payments, Denver’s Metropolitan Football Stadium District officials have said.
Marketing experts say Sports Authority should make efforts to retain its naming-rights on the Denver stadium.
Alicia Wallace: 303-954-1939, awallace@denverpost.com or @aliciawallace
