Finish Line Inc. is seeking a buyer for its run specialty business, JackRabbit, according to a report from Bloomberg.
Sources said the division could draw interest from private equity firms and other sporting goods chains.
The report isn’t surprising considering that the segment has been underperforming largely since it was launched about four years ago. On its second-quarter conference call held on September 23, Finish Line’s officials also indicated that it planned to make a decision on whether to continue investing in JackRabbit or divest the chain by the end of its fiscal year.
On the call, Sam Sato, the company’s CEO, indicated that the chain was making progress growing its top line but profitability levels were below plan. He said, “We remain committed to this business, but as I said, until we start achieving those milestones, the decision to reinvest in the business is still open. But we are committed to making a decision on JackRabbit before the end of this fiscal year.”
Finish Line formed Running Specialty Group (RSG), the predecessor name to JackRabbit, in 2011 after purchasing an 18-store chain for $8.5 million operating under The Running Company banner. With a goal to consolidate the run specialty channel, it subsequently acquired multiple run specialty stores across the country to create the second-largest run specialty group in the U.S.
In March 2015, Finish Line put the brakes on any further expansion of its run specialty business while it focused on improving profitability. In September 2015, Finish Line decided to gradually rebrand all of the segment’s multiple banners to JackRabbit Sports and that process continues. The segment’s banners include JackRabbit, The Running Company, Run On!, Blue Mile, Boulder Running Company, Roncker’s Running Spot, Running Fit, VA Runner, Capital RunWalk, Richmond RoadRunner, Garry Gribble’s Running Sports, Run Colorado, Raleigh Running Outfitters, Striders and Indiana Running Company.
Photo courtesy JackRabbit
