The whole retail industry is panicking over Sports Authority's bankruptcy
AP
It could spell trouble for retailers.
Bloomberg reports that Sports Authority's collapse has made retailers concerned about the way they have been operating.
"You could make the argument that given the state of retail, everyone's going to be analyzing - whether or not it's retailers or lenders - what makes the most sense and, in particular, vendors," Mike Murray, senior managing director at Wells Fargo & Co, said to Bloomberg.
The consignment business model is one area that retailers are concerned about, as Bloomberg notes that Sports Authority explained in court documents that the business had $85 million worth of consigned items in stores at the beginning of its bankruptcy.
This puts companies in a sticky situation, Bloomberg reports: does the retailer or do the vendors own the goods that are being sold off?
Sports Authority's downfall has been a burden for top tier brands, such as Under Armour, which UBS analysts noted had "bloated post holiday '15 inventories."
Ironically, one of the things that plagued Sports Authority - a lack of a real shopping experience- is something that Nike, with its high-tech personalization and run clubs, and Under Armour, which plans on opening a store that fuses experiences with traditional shopping in FAO Schwarz' former Manhattan home, thrive upon.
Sports Authority's downfall comes at a time that other once-dominant retailers failed. It came several months after Quiksilver and American Apparel filed for Chapter 11 bankruptcy. This spring, former teen stalwarts Aeropostale and PacSun filed for bankruptcy.
- A centenarian who starts her day with gentle exercise and loves walks shares 5 longevity tips, including staying single
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- FSSAI in process of collecting pan-India samples of Nestle's Cerelac baby cereals: CEO
- Unemployment among Indian youth is high, but it is transient: RBI MPC member
- Private Equity Investments
- Having an regional accent can be bad for your interviews, especially an Indian one: study
- Dirty laundry? Major clothing companies like Zara and H&M under scrutiny for allegedly fuelling deforestation in Brazil
- 5 Best places to visit near Darjeeling
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market