Sports Direct International has completed its acquisition of Bob’s Stores and Eastern Mountain Sports (EMS). By all indications, the U.K.’s largest sporting goods retailer, Sports Direct, will enter U.S. retailing with 51 stores (21 EMS, 30 Bob’s) and is already planning on bringing some of its European mix to U.S. consumers.
At the time of its bankruptcy filing, Eastern Outfitters, the parent of EMS and Bob’s, operated 86 stores (51 EMS, 35 Bob’s). Significantly fewer Bob’s locations wound up closing during the bankruptcy process while a few more EMS stores closed than initially planned. Sports Direct paid $101 million in cash for the business.
“We are excited to expand our presence in the United States via the acquisition of Bob’s Stores and EMS,” said Sports Direct said in a statement. “Adding these reputable and established retailers to Sports Direct’s portfolio of holdings in the U.S. will afford us a strong platform with which to rapidly expand our store and web presence, in this critically important market.”
The statement added that the coming months will be marked by an expansion of product lines available in the U.S. stores and websites, including the U.S. debut of an “extensive portfolio of European brands at exceptional value.”
Sports Direct will also honor gift cards and unexpired member rewards that pre-dated the acquisition and plans to enhance its member rewards program by offering member-only offers.
In its statement, Sports Direct will said it “initially operate approximately 50 brick and mortar stores” in the Northeastern U.S., five EMS outdoor adventure schools, plus ems.com and bobstores.com.
According to listings on Eastern Mountain Sport’s website, Sports Direct will continue with 21 EMS stores.
EMS will have eight stores in New Hampshire (Portsmouth, Manchester, Peterborough, West Lebanon, Peterborough Manchester, North Conway, Concord); six in New York (Lake Placid, Rochester, Albany, Ithaca, Gardiner, Saratoga Springs); two in Massachusetts (Hadley, Marlborough), two in Connecticut (Avon, Waterford) and one each in New Jersey (Bridgewater), Maine (Portland) and Pennsylvania (Warrington.)
According to the listings on Eastern Mountain Sports’ website, 12 stores are in the process of being closed. These include Nashua, NH; Acton, MA; Newton, MA; Manchester, CT; Hyannis, MA; Syracuse, NY; Collegeville, PA; Exton, PA; Scarsdale, NY; Annapolis, MD; South Burlington, VT; and Amherst, NY.
Listings on Bob’s website show the casual apparel and footwear chain will continue to operate 30 locations. They include 11 stores in Connecticut (Norwalk, Fairfield, Milford, Ansonia, Hamden, Waterbury, Middletown, Newington, Simsbury, Waterford, Enfield); ten in Massachusetts (S. Attleboro, Shrewsbury, Franklin, Billerica, Middleton, Seekonk, Fitchburg, Raynham, Saugus, Randolph); three in New Jersey (Springfield, Totowa, Freehold); three in New York (West Islip, Patchogue, Selden); two in New Hampshire (Nashua, Salem) and one in Rhode Island (Cranston).
Bob’s is currently undergoing store closings in three locations: Danbury, CT; Manchester, CT; and Framingham, MA.
At the time Eastern Outfitters filed for bankruptcy on February 6, Sports Direct committed to serve as the stalking horse bidder for its assets at a bankruptcy auction. Sports Direct also agreed to purchase second lien debt from Versa, which had acquired the company out of bankruptcy proceedings last year, as well as to fund the bankruptcy financing the chapter 11 case. The $101 million purchase price represents amounts already advanced by Sports Direct to support bankruptcy funding and the acquisition of Eastern Outfitters’ debt.
In its year ended January 28, the businesses being acquired incurred a pre-tax net operating loss of $26 million, according to Sports Direct. As of the same date, gross assets of the businesses being acquired were $126 million.
Sports Direct is the U.K.’s largest sporting goods retailer, operating almost 800 stores across the U.K., continental Europe and Asia. Additionally, the company operates Premium Lifestyle and Outdoor divisions and owns a portfolio of over 30 globally recognized brands, including Slazenger, Everlast, Lonsdale, Karrimor, No Fear and Kangol.
In the U.S., Sports Direct has recently also been earning some headlines for acquiring an 18.9 percent stake in Finish Line Inc. since the beginning of the year. The purchases came as shares of Finish Line in late March fell to a six-and-a-half-year low after the company reported earnings that fell well short of guidance due to markdown pressures.
Sports Direct has a history of taking strategic stakes in related companies including Debenhams, JD Sports and the online specialist Findel. In early February, it acquired an 11 percent stake in French Connection and it also has as small stake in Iconix Brand Group. Sports Direct generally holds such stakes for investment purposes rather than takeover intentions, but the publicly held retailer is said to be under pressure to meet its growth targets.
Mike Ashley, its controversial CEO, who also owns football team Newcastle United, holds a controlling 55 percent stake in the retail chain.
Photo courtesy Bob’s Stores