DALLAS — Sports Authority, a company that gobbled up regional sporting goods retailers including Texas-based Oshman’s Sporting Goods in the late 1990s and early 2000s to become a national chain, is giving up on Texas.
The Englewood, Colorado-based retailer is closing all 25 of its Texas stores, according to store employees.
That includes nine stores in North Texas, where it competes with the largest U.S. sporting goods chains, No. 1 Dick’s Sporting Goods and No. 2 Academy Sports & Outdoors.
The Denton store at Denton Crossing in the 1800 block of South Loop 288 is one of those nine stores.
Sports Authority didn’t respond to a request for an interview. The Denver Post quoted a source Wednesday saying the company is closing 140 of its 450 stores as reports have surfaced in recent weeks that it’s preparing to file for bankruptcy.
In January, the company missed a $21 million interest payment on its $643 million in debt.
Sports Authority was acquired in 2006 in a $1.4 billion leveraged buyout by Los Angeles-based private equity firm Leonard Green & Partners.
Bloomberg News and others have been reporting for weeks that Sports Authority Inc. was preparing to file for bankruptcy as it faced a debt payment.
Once the biggest U.S. sporting goods chain, Sports Authority was reportedly in talks with lenders including TPG Capital Management of Fort Worth on a deal to reorganize in Chapter 11 bankruptcy proceedings.
Like toys, books, home goods, electronics and office supplies before them, big box specialty chains have struggled as they have opened too many stores and online shopping continued to pluck customers away.
Sports Authority employees were told last week that the big box chain is closing its Texas stores, but on Wednesday employees said they didn’t know when the stores are closing.
Sports Authority closed a store in McKinney on Christmas Eve.
Besides the Denton location, the chain also has other local stores in Dallas, Farmers Branch, Frisco, Fort Worth, Mansfield, Rockwall and two in Plano.
In Texas, Sports Authority has “well-located stores in strong regional pockets,” said Jeff Kittleson, senior vice president of CBRE’s retail services in Dallas.
“I think there will be a garden variety of big box users who will want to reposition stores into these locations.”
On a national scale, Dick’s Sporting Goods will benefit in the long term from Sports Authority’s retrenchment, according to a Credit Suisse report last month that estimated 40 percent of Dick’s stores overlap within 10 miles of a Sports Authority.
Too many stores is one of the key concerns for investors of sporting goods retailers, said Credit Suisse, adding “that pressure could be moderating” with Sports Authority’s restructuring.
Academy Sports & Outdoors has been an aggressive competitor. The Katy-based retailer had twice as many stores as Sports Authority in North Texas.
It operates 209 stores in 15 states including 18 in Dallas-Fort Worth. The company had sales last year of $4.6 billion, only behind Dick’s annual sales of $6.8 billion.
Texas is a big market for sporting goods chains. Hibbett Sports also has a big footprints in the state.
The biggest sports apparel brands are opening their own stores.
NorthPark Center, which already has a large Nike store, is getting the first Under Armour store in the market this spring.
Then there’s the big outdoors chains: Bass Pro Shops has stores in Garland, Grapevine, Harlingen, Katy, Pearland, Round Rock and San Antonio. Cabela’s Texas stores are in Allen, Buda, Fort Worth, League City, Lubbock and Waco.
The consolidation may be spreading. Since before Christmas, there have been strong reports that Bass Pro Shops may be buying Cabela’s.