BUST: Why Do So Many Sports Stores Declare Bankruptcy?
Among the MULO (multi-location) sporting goods stores that filed for Chapter 11 during the past decade are:
- Mountain Sports (50 sporting goods and apparel stores in seven states under Eastern Mountain Sports and Bob’s Stores brands)
- Olympic Sports (70 stores)
- Modell’s (153 stores)
- Sport Chalet (47 stores in California, Arizona, Nevada and Utah)
- Sports Authority (which had 463 stores nationwide). The brand was acquired by Dick’s sporting goods, which now has 850 stores.
The last one illustrates that the category itself is not necessarily dying but that the move to online buying, the impact of the pandemic, and the high costs of maintaining large store footprints and extensive inventory may simply create an industry where only a select few “winners” will emerge.
Dick’s is clearly an example of that, and their recent ad campaign focuses on their omnichannel presence, which is the key to any retail business’ survival and success these days.
REI is another MULO sports-related retailer that seems to be doing well. They recently announced the addition of some new locations to their current 181 locations. Their “community” and focus on sustainability contribute to their brand reputation, which appeals to many committed fans of the great outdoors (as well as people new to nature-based activities).
Scheel’s was founded in 1902 and is employee-owned. With 34 locations, it is not at the scale of the previously mentioned competitors, but it has clearly built a loyal and lasting following in the states in which it operates.
Another trend that may impact sporting goods stores’ performance is the move to specialized sports stores. Consumers who enjoy tennis (and other racquet sports), camping, golf, cycling, skiing, and other activities sometimes seek out mom-and-pop boutiques. Even though the selection may not be as broad, the people who own these stores are often sports fanatics and can offer different (and perhaps more in-depth and personal) counsel and services.
The industry itself is valued at $64B in the U.S. alone.
Adults and kids seem to still need balls, bats, racquets, footwear, apparel, and a wide range of accessories that may not make gameplay better but can make us all look like pros.
But the companies that sell to these consumers need to keep watching their business scorecards and ensure they don’t make the Chapter 11 list next season! (We have, however, written about how bankruptcy filings are not necessarily a death knell for all brands; they may simply be a step towards restructuring and/or moving to an online-only model.)
Remember to join us on November 7th to learn ways to keep your MULO brand alive and well. (And if you’re an agency or tech company professional, how to serve those brands).
