Dick's Surges After Analyst Calls It ‘Only Game in Town’by
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.