From the South Florida website: As bankrupt Sports Authority seeks to close some 460 stores nationwide, there’s no one retailer ready to fill all its space.
Instead, some of its locales may go to rival sporting goods chains. Some will go to other kinds of big-box retailers, from supermarkets to furniture outlets. And some will be divided up into “junior boxes” that could attract off-price fashion sellers and others.
That’s the consensus from retail and real-estate specialists interviewed by The Real Deal. They cite as evidence that Sports Authority could not find a buyer when it sought to re-structure in March. The chain announced plans in May to liquidate.
“Dick’s Sporting Goods won’t take it all, and nobody else in the business really can handle that size of stores or has the money to do it,” Cynthia R. Cohen, president of the Miami-based retail consulting firm Strategic Mindshare told TRD. “So, it will be a patchwork quilt of solutions.”
Several factors point to patchwork occupancy for the stores, many about 40,000 square feet and located in strip malls, specialists say.
For starters, fewer retailers want big boxes these days, as multi-brand chains face growing competition from online sellers, single-brand shops and specialty purveyors. Office supply sellers Staples and Office Depot, for example, are shifting to smaller spots, Cohen said.
In addition, lots of retailers now seek space in enclosed “regional” malls that tend to draw more traffic, or in open-air “lifestyle centers” that have landscaping, closed streets and a more walkable vibe, specialists add.
Even sporting goods rivals may not want Sports Authority’s key spots. Specialty chains like leisurewear seller Lululemon look for smaller venues, and discounter Academy Sports + Outdoors tends to look for places that pay less expensive rents, said Andrew D. Carlson, vice president of retail brokerage at commercial real estate services firm JLL.
That leaves many of the chain’s big boxes likely to host other kinds of retail, including grocery stores.
Landlords also are likely to break up some of the big boxes into smaller units. Those junior boxes could lure fashion retailers branching out to strip malls with new concepts such as Forever 21’s “family-oriented, fast-casual” F21Red chain, he said.
Big boxes also are being re-directed nowadays for purposes other than stores – from churches to community centers, gyms to government offices, said Steve Kirn, executive director of the Miller Center for Retailing Education and Research at the University of Florida.
A standalone Sports Authority box outside the downtown area, in a Class B strip mall easily accessible by car or public transport and offering lots of parking, could appeal to the government of a growing city as a site for offices to serve the public, Kirn said. “Why would I build a new building, if all I have to do is put in some desks and the internet?” he told TRD.
To be sure, the shutdowns may bring losses. Less competition among sporting goods chains likely means fewer places for amateurs to try out bats or other equipment to find what they like, as well as reduced support for Little League teams and community sports groups, said Cohen.
“One thing Sports Authority did well was sell amateur equipment for local teams, hunters and fishermen,” said Cohen. “But today, depending on the market, you have fewer choices or have to go online.”
One measure of interest in Sports Authority’s locations will come this month. The chain has set a June 29 date to auction off leases on 320 of its stores, including 48 in Florida. The deadline to present offers is June 23.