The UK’s largest sports retailer will buy the 50-year-old American outdoor retail chain for $101 million.
Eastern Outfitters LLC received approval from a Delaware bankruptcy court last week to sell all of its 50 retail stores to England’s Sports Direct. The sale includes all Bob’s Stores and Eastern Mountain Stores (EMS) brands.
According to a press release, Sports Direct agreed to buy Eastern Outfitters and all of its debt for $101 million in cash. Eastern Outfitters, which won approval this month to close 48 stores under Chapter 11 proceedings, was last valued at $126 million in gross assets.
Sports Direct Buys Eastern Outfitters
Sports Direct currently operates almost 700 stores worldwide, but this would mark the brand’s brick-and-mortar entry into the U.S. market. There is no statement on how many stores it plans to keep open or close following the purchase.
Vestis Retail Group, which owned Bob’s Sports, Sport Chalet, and EMS, filed for bankruptcy in April 2016. It closed Sport Chalet and reorganized its efforts to continue the EMS and Bob’s Sports brands.
The U.K. giant already owns well-known sporting goods brands like Dunlop and Everlast.
Sports Direct Controversy
News of the sale quickly drew criticism from U.K. analysts. They cited Sports Direct’s sliding financial standing and questionable business practices.
In December, Sports Direct released a profit warning to shareholders. It revealed issues with its manufacturers and the declining value of euro.
The brand also came under fire for its working conditions. An investigation by The Guardian in 2015 found that workers received hourly wages effectively below minimum standards, and faced harsh time penalties and body searches.
Following the investigation, Sports Direct announced it would put a workers’ union representative on its board to address employee concerns.
Sports Direct expects to finalize the acquisition in May.
