Report: Sports Authority Might Sell Stores To Modell’s And UK’s Sports Direct

Image courtesy of Mike Mozart

At their recent bankruptcy auction, the winner of the inventory in Sports Authority stores was a trio of liquidators, not the company’s competitors. Other chains didn’t want to take on hundreds of stores at a precarious time in the sporting goods business. A new report, however, indicates that United Kingdom retailer Sports Direct might team up with Modell’s, a chain in the northeastern United States, to bid on at least a hundred store leases in one go.

What Modell’s declined to do back in May was take over open Sports Authority stores as a going concern, or as operating businesses. That would have included the store merchandise and fixtures. Instead, liquidators are selling that merchandise off at modest discounts, and the chain’s store leases would have gone up for auction this week.

That auction has been delayed because of a potential deal with Modell’s and Sports Direct, which would bid together like a team of international sporting goods pals. They would take over between 100 and 200 stores, an inside source told the Wall Street Journal, though the deal may not go through.

Theoretically, the two companies could even keep the Sports Authority brand alive by purchasing the brands and customer lists that the now-defunct chain is selling in their bankruptcy auction.

While competitors like industry leader Dick’s Sporting Goods have said that they have their eye on a few of Sports Authority’s stores, some leases might simply go unsold and wait for a new tenant. Some of the chain’s more massive stores might have to be subdivided before other retailers might be interested.

Sports Direct, Modell’s Discuss Joint Bid for Sports Authority [Wall Street Journal]