Posts Tagged 'Sports Authority'

End of the line for Toys “R” Us?

Big retail news of the day (as discussed at RetailWire) is the announcement that Toys “R” Us is throwing in the towel. Here’s my post-mortem:

It’s unlikely that Toys “R” Us is going to stay afloat, and this is a big deal for those who follow the recent history of retailing. They were among the first “category killer” stores with broad assortments of a single category in a big-box format. There have been others (Linens ‘N Things, Sports Authority, etc.) but this one stands out. If you see reporting on “the Amazon effect,” it’s more complicated than that.:

It’s tough to survive in a highly seasonal business like toys given the growth of e-commerce and the dominance of discounters in the same category. And there has been a generational change, where many of today’s kids are interacting with technology (smartphone apps, streaming video games) instead of the toys of a short time ago.

And one more lesson learned: A mountain of private-equity debt doesn’t help. On this point, an added thought from a more recent RetailWire discussion:

TRU was partly the victim of private-equity debt burdens, but also made its own mistakes. This is an example of a big box store with too much square footage — in a seasonal business facing robust competition from discounters and Amazon — failing to adapt.

There is probably enough brand equity remaining to salvage the business, provided that Storch and team rethink the model. (And get rid of that debt load.) Maybe an online-only play is the place to start, instead of trying to recapture the past.

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Sports Authority: What do its problems mean for retail?

Sports Authority recently announced a chapter 11 filing as well as its plans to close or sell many of its locations. RetailWire panelists had a chance recently to dicuss what these developments mean for the broader world of retailing:

There are two issues at play here: Yes, there is an overall recognition by brick-and-mortar retailers that they have too much square footage as their own “omnichannel” business cannibalizes their physical stores. It’s an issue for all kinds of retailers, from Walmart to Kohl’s to Macy’s.

But Sports Authority’s struggles are symptomatic of the problems plaguing “niche” big box stores for several years. There has been a survivor (Best Buy, Bed Bath & Beyond, Barnes & Noble) and a failure (Circuit City, Linens & Things, Borders) in just about every niche you can think of — and even the “winners” are struggling with too much square footage.

Underlying the consolidation in the sports apparel and equipment industry? First, the impact of Amazon and other online competitors on just about every retail segment. Second, the push into activewear by every department store and apparel specialist you can name.

A new concept from Sports Authority

Sports Authority is developing a new concept called “S.A. Elite,” offering a more focused selection of branded sport apparel in a smaller footprint. I have mixed feelings about the idea, as I noted on RetailWire recently:

Interesting idea to present a more focused selection in a smaller footprint, and this allows Sports Authority to develop sites in locations (malls, lifestyle centers) unable to take on a full-size store. It’s unclear, however, how the “S.A. Elite” name communicates the concept effectively. The smaller prototype seems to be geared toward a narrow selection of branded sport apparel, without the breadth of “hardlines” carried in a full-line store. Does “Elite” really put this idea across, and does it potentially turn off the customers that SA would like to attract?


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