Sports Authority’s loss could be Dick’s Sporting Goods’ gain, analysts say.
Dick’s, the nation’s largest sporting goods retailer, is the most likely bidder for the majority of Sports Authority store leases that could go to auction next week, a Canaccord Genuity analyst wrote Monday in a research note to clients.
Analyst Camilo Lyon’s base-case scenario has publicly traded Dick’s scooping up 80 Sports Authority leases.
The best-case scenario? 180 stores.
“We view DKS’ national presence (vs. Academy’s regional presence) as a key advantage when it contemplates which stores to target,” Lyon wrote.
When Sports Authority bankruptcy protection in March — pursuing a “dual-path” process of reorganizing or selling — the Englewood-based retailer laid out plans to close of its 463 stores.
, Sports Authority in advance of May 16, a key date when some of the leases from the closing stores along with other assets — such as leases for some of the more than 320 remaining locations — are set to go to auction.
Lyon previously estimated that Sports Authority’s closing of 140 stores could result in a $370 million sales boost to Dick’s.
If Dick’s acquires the 80 stores that do not have competition within a 10- to 25-mile radius, the retailer could gain $500 million in incremental sales, according to the note.
Of those 80 stores, 42 are in Colorado, California and Florida, Lyon said.
“We now have three key structural drivers (sales recapture from TSA closures, new stores openings, and e-commerce coming in house in 2017) that should provide a consistent tailwind to both sales and margins for the next two years,” Lyon wrote.
Lyon estimates that Dick’s annual sales could be more than $7.8 billion in 2016 and $8.3 billion in 2017. The company posted sales of $7.3 billion in 2015.
The CEO of Dick’s previously said the from the flailing Sports Authority.
