Finish Line Said to Seek Buyer for Its JackRabbit Runners ChainBy and
Company could see interest from private equity firms
Sportswear industry rocked by several bankruptcies this year
Finish Line Inc. is looking for a buyer for its JackRabbit chain of specialty running-shoe stores, marking a turnabout from an ambitious expansion in that category, according to people familiar with the matter.
The division, which has about 70 locations under various names, could draw interest from private equity firms and other sporting-goods chains, said the people, who asked not to be identified because the process isn’t public.
It’s been a tough year for sporting-goods merchants, with the retailers Sports Authority, Eastern Mountain Sports and Golfsmith all filing for bankruptcy, along with equipment maker Performance Sports Group. Even as it looks to offload JackRabbit, Finish Line is seeking growth elsewhere. The company launched a new web page last month specifically aimed at women.
Dianna Boyce, a spokeswoman for Finish Line, declined to comment.
Finish Line fell 3 percent to $19.10 as of 3:05 p.m. in New York Tuesday. The shares had climbed 8.9 percent this year through Monday’s close.
Finish Line previously expanded by buying up small, regional running stores, including its 2011 acquisition of the Running Co. After buying New York-based JackRabbit, it decided last year to rebrand all its specialty running stores with that name.
But the shine has come off the high-end running shoe market over the past year. Consumers have gravitated toward less technical sneakers, and there’s been declining participation rates in long-distance races, according to NPD analyst Matt Powell.
For several years, the shoemakers and retailers could count on shoes meant for marathon training morphing into a mainstay of everyday wardrobes. But that trend has been overtaken by a shift to more retro and casual sneakers. Sales of performance running shoes in the U.S. this year have declined at a mid-single-digit percentage rate, Powell said.
“Running is much more social and lighthearted now,” Powell said. “It’s: ‘I’m out with my friends and having a good time.’ If that’s how you are approaching your fitness, you probably don’t need a $150 running shoe.”
Specialty running stores are also a difficult operating model. Costs are higher than with other kinds of athletic footwear stores because salespeople need more expertise. Discounting and promotions aren’t a core part of the strategy. It’s also increasingly difficult to keep up with online competitors.
Finish Line, based in Indianapolis, operates about 590 Finish Line stores, in addition to the running-store unit.