U.K. sporting goods retailer Sports Direct International SPD 6.96 % PLC is in talks with Modell’s Sporting Goods about a potential deal to acquire as many as 200 Sports Authority stores out of the retailer’s bankruptcy, according to people familiar with the situation.
Sports Authority revealed in court papers filed Friday that it is in advanced discussions regarding a potential sale of 100 to 200 of its stores. On Monday, people familiar with the situation told The Wall Street Journal that Modell’s and Sports Direct are discussing teaming up on a bid for these stores.
Modell’s and Sports Direct didn’t immediately respond to requests for comment Monday afternoon. A Sports Authority representative declined to comment.
- Liquidators Win Approval to Sell Sports Authority Inventory (May 24)
- Here’s the List of Sports Authority Stores on the Block (March 2)
- The Sports Authority Lays Off 100 Employees (Jan. 30)
Bids for Sports Authority store leases are due Thursday, and stores with leases that go unsold are in danger of going dark. With going-out-of-business sales in full swing at some 450 Sports Authority stores, the possible deal could be the last hope of saving anything of the ailing business. Sports Authority filed for chapter 11 bankruptcy in March and is expected to wrap up its liquidation by the end of July.
The talks with Modell’s and Sports Direct are still ongoing, however, and could fall apart any time before Thursday, one of the people said.
Landlords and other creditors are taking a wait-and-see approach to the possible deal, after a bankruptcy proceeding that has been marred by speculation about transactions that never came through.
“We are proceeding cautiously at this stage in advance of the bid deadline because we have heard lots of rumors before,” said Ivan Gold, a San Francisco lawyer who represents a number of landlords in Sports Authority’s bankruptcy.
Sports Authority sold its inventory to a trio of liquidators in a bankruptcy auction in May after failing to attract a going-concern bid for its business.
Peg Brickley at firstname.lastname@example.org and Lillian Rizzo at Lillian.Rizzo@wsj.com