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Sports Authority finally gave in on Wednesday to the enormous debt load that impeded its ability to keep pace with rivals like Dick’s Sporting Goods DKS -1.09% in riding the big fitness boom of the last decade.
The retailer filed for Chapter 11 protection in federalbankruptcy court in Delaware in a move aimed at helping it shed much of its debt and clean up its balance sheet. Sports Authority, which will close about 140 of its 463 stores, had been saddled with debt ever since a $1.3 billion leveraged buyout a decade a ago.
Back then, Dick’s and Sports Authority were about even in size, with annual sales of about $3 billion. But in the years since, Dick’s has pulled way ahead, thanks to better in-store presentation and tech in stores. Even though Dick’s same-store sales growth slowed in the first nine months of 2015, revenues by that metric are likely to clock in their sixth straight year of growth. (Wall Street analysts expect total2015 sales of $7.3 billion, compared to almost $3 billion at Sports Authority.)
The following report is from Bloomberg
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