Why Sports Chalet is closing all its stores
The parent company of Sports Chalet, Vestis Retail Group, LLC, filed for bankruptcy Monday, two days after announcing all its stores are closing, many of which are in Southern California.
"After reviewing a variety of strategic alternatives, we determined that the best path forward is to separate the businesses and confront the challenges that have been hindering our overall progress," the company said in a statement, referring to the two brands it will continue to operate: Eastern Mountain Sports and Bob's Stores.
Analysts say Sports Chalet struggled because of considerable competition from similar stores. Quite simply: there are too many places to buy baseball gloves and tennis racquets. One of Sports Chalet's competitors, Sports Authority, also filed for bankruptcy last month.
“This is a consolidation that’s been a long time coming,” said Camilo Lyon, managing director for equity research at CANACCORD Genuity.
Other sectors of retail are typically dominated by two large chains only, according to Lyon.
"Sporting goods is still a pretty segmented industry," he said.
But it’s not just sporting goods stores that are struggling, it’s all large stores.
“No one really wants to go to a big box store anymore," said retail consultant Kristin Bentz. "You can order pretty much anything you need in life from Amazon.”
Bentz said consumers still like to go shopping, but increasingly they prefer smaller, curated shops which are more about having an experience than just picking up a new pair of shoes.
“You know who’s really doing it well?" asked Bentz. "Warby Parker and Birchbox."
Those are two specialty retailers that started out online and now have thriving brick and mortar shops. As for the traditional big boxes, Bentz expects more bankruptcies and cutbacks. Indeed, on Monday afternoon, Nordstrom announced its cutting up to 400 jobs.
"The way consumers are shopping has changed, and big box retailers are the ones left holding the bag," she said.