It seems that sporting goods retailers are in a slump. Last week The Sports Authority filed for bankruptcy and said it will close nearly a third of it’s 450 stores over the next three months. It ha not yet been disclosed which stores will close. Bankruptcy has been looming since January when the retailer disclosed that it had missed a $20 million debt payment.
Earlier this week, Performance Sports Group Ltd., one of the biggest makers of baseball bats and other sporting equipment slashed their 2016 fiscal year forecast. The company expects to report revenues of approximately $125 million, or 9% lower compared to the same quarter last year. Shares of Performance Sports fell 65% to about $4.00 in trading on Tuesday.
“The second half of fiscal 2016 has been impacted by adverse market conditions and related customer credit issues,” said Kevin Davis, CEO, Performance Sports Group. “The baseball/softball market is experiencing an unexpected significant downturn in retail sales, including in our important bat category. This weakening of consumer demand, coupled with the chapter 11 filing by one of the largest U.S. national sporting goods retailers, is reducing our sales for baseball and softball products.”
Also this week, Dick’s Sporting Goods Inc. reported weak holiday results, with both fourth quarter and full-year same-store sales declining. Despite the decline in profits, Dick’s announced ambitious store expansion plans in 2016 and points to the success of their e-commerce business. The company ended the year with e-commerce penetration at a record 15.7% of sales, compared to 14.4% in the fourth quarter of 2015.
“This is certainly a unique time in the industry. The competitive landscape is evolving, which is creating pressure for some and opportunities for others,” said Dick’s CEO Edward Stack.
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