Sports Authority was once a premiere destination for sporting goods.
But on Wednesday, the company announced that it would file for Chapter 11 bankruptcy.
“We are taking this action so that we can continue to adapt our business to meet the changing dynamics in the retail industry,” CEO Michael E. Foss said in a release.
It seems almost counterintuitive — in an era that’s practically defined by activewear and an increased consumer appetite for athleticism, how could a sporting goods store go wrong?
But Sports Authority imploded by failing to adapt to how athletic apparel has evolved.
Sports Authority’s struggles aren’t an unfamiliar story; Dick’s Sporting Goods has been racing to catch up to the athleisure trend. It launched its off-shoot Chelsea Collective and started selling Carrie Underwood’s athleisure brand, Calia to boost sales.
Sports Authority has failed to even try to innovate; it makes Dick’s look like a success story.
“Although the sports market in general has performed well over recent years, Sports Authority has not been able to secure enough of that growth. It’s stores are hard to shop, uninspiring and dull and it has seen customer traffic dwindle,” Neil Saunders, CEO of consulting firm Conlumino, wrote in an email to Business Insider. “In a market where so many players, including Dick’s have put more effort into the in-store experience, the response of Sports Authority has been inadequate. This has left it more exposed to erosion from the growth of online generalists like Amazon.”
Men are shopping online more than women are, which could be perpetuating this even more. Further, if men can buy “things” on sites like Amazon, why bother venturing into a sporting goods store to buy a baseball bat?
The only way to hook customers into a store would be to make shopping there an ‘experience’ — but Saunders pointed out that Sports Authority isn’t a “destination for consumers” and it’s “cheaper and more convenient to shop online or at rivals.”
To make matters worse, Sports Authority’s merchandise is stuck in the past.
“The other point is around product, Sports Authority has tended to stick to its traditional strengths, like golf, rather than branching out into new growth areas such as athleisure and fitness. This has made it less relevant to consumers and less able to compete with rivals,” Saunders wrote.
Meanwhile, other companies that sell activewear have managed to not only keep up, but school others in how to rule the sportswear sector.
Under Armour and Nike have successfully marketed to athleisure-loving women, and Lululemon has mastered hooking customers with its yogic grasp. Each company gives a compelling reason to shop there or purchase its respective products — overcome the odds with Under Armour, be your best athlete self with Nike, and join the community at Lululemon — Sports Authority, however, hasn’t done that. It’s failing to resonate, and it appears that it doesn’t know what it wants to be to whom.
“That lack of traction with any particular consumer group means it has simply lost the race in sports retail. Chapter 11 gives [Sports Authority] breathing space but solving many of these issues is going to be extremely difficult given how far they are lagging behind and how much they’d need to spend to make up ground,” Saunders added.
It’s tough time to be a retailer as it is; Sports Authority isn’t the only apparel company to file for bankruptcy. In September, Quiksilver filed for Chapter 11 bankruptcy. American Apparel followed suit in October.
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