Sports store bankruptcies stand to benefit rivals – Los Angeles Times

It’s a zero-sum game for bricks-and-mortar sporting goods retailers, so the demise of Sport Chalet and now Sports Authority could be a win for the few traditional players that still remain.

This month, Sport Chalet, a 57-year-old chain based in La Cañada Flintridge, said it was closing all 47 of its stores after years of financial troubles. And this week Sports Authority, which filed for bankruptcy protection in March, said it will ditch its reorganization plan and instead hold an auction for the company, potentially selling it off in pieces.

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The eventual buyer or buyers, however, might not want to keep stores open and could opt to liquidate the assets; when Sports Authority filed for bankruptcy, it had 463 stores nationwide and said it would close or sell about 140.

It’s the latest shake-up in a rapidly evolving sporting goods industry that is fighting off competition from mass-merchant discounters, online retailers and specialty high-end brands.

“There are more choices for the consumer now,” said Diana Smith, senior research analyst for retail and apparel at the research firm Mintel Group Ltd. “There is not enough room for everyone.”

Although the industry has splintered, a few of the longtime chains — namely Dick’s Sporting Goods, Big 5 and REI — have remained healthy and stand to gain now that the playing field is thinning out.

Their resilience is due to distinct business strategies: for Dick’s, a massive national footprint with a wide range of merchandise and niche products such as firearms; for Big 5, smaller footprint stores with a more limited assortment, but at lower prices; and for REI, a steadfast focus on customer experience.

Dick’s in particular has emerged as the dominant player for those seeking everything, said Rory Masterson, industry analyst at IbisWorld. It has also succeeded by embracing the Internet, negotiating good deals from suppliers and offering customers a high level of service through in-store experts, Masterson said.

At a time when retailers across the board have been scaling back on physical stores, Dick’s has been able to rapidly expand. In the last five years, the number of Dick’s stores jumped to 644 from 444, according to the company’s 2015 annual report.

“They’ve mastered the art of the general sporting goods store,” Masterson said.

Like Dick’s, other industry leaders such as REI and Cabela’s Inc. also established stronger relationships with suppliers and developed the kind of leverage on the supply side that smaller operators like Sport Chalet were unable to match.