Dick’s Sporting Goods Inc. shares jumped almost 5 percent after Deutsche Bank AG predicted the company will be the biggest beneficiary of Sports Authority Inc.’s bankruptcy.
As Sports Authority moves toward shutting down stores, Dick’s is poised to pick up much of the bankrupt chain’s $2.6 billion in sales, Deutsche Bank analyst Mike Baker said in a report. Sports Authority’s likely demise as a sporting-goods seller makes Dick’s “the only game in town,” he said. Dick’s also will probably acquire some of the Sports Authority locations, Baker said.
Sports Authority, once the largest sporting-goods retailer in the U.S., filed for bankruptcy in March. Though the company has sought to continue operating with a smaller fleet of stores, Sports Authority said last month that it would pursue a sale or liquidation of its stores instead. The move will flood the market with discounted merchandise, hurting Dick’s in the short term, but it will get a windfall in the long run, Baker said.
Dick’s stock rose as much as 4.8 percent to $48.56 in New York on Monday. Before the latest gain, the shares were up 31 percent this year.
Dick’s management said on a conference call in March that it was interested in Sports Authority real estate and would be “aggressive” about going after the rival chain’s customers.