Sports Authority Bankruptcy Indicates 'Secular Implosion Of Traditional Retail'

Sports Authority filed for Chapter 11 protection Wednesday after rumors of the company's bankruptcy swirled around the Street over the past month. The retailer will close 140 stores, according to a report by Bloomberg.

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The sporting goods retailer files as the wider retail sector struggled with the fallout from warm winter weather's impact on outerwear demand and slumping holiday sales.

Retail analyst Kristin Bentz wrote in an email to Benzinga that Sports Authority's bankruptcy is a symptom of a macro trend in the retail sector that emphasizes a mix of smaller physical store presence and increased online and mobile capability.

"This is more an indication of the secular implosion of traditional big box retail," Bentz wrote.

Bentz pointed to Lululemon Athletica inc. (NASDAQ: LULU)'s strong brick-and-mortar and digital footprint as an ideal mix.

Bentz does not expect the competition, like Dicks Sporting Goods Inc (NYSE: DKS) or Foot Locker, Inc. (NYSE: FL) to swoop in and buy up any of the closing Sports Authority stores.

"If I were Dicks, I would celebrate the demise of another competitor and leave their store count as is," Bentz wrote.

Bentz was pessimistic about the company's chances of escaping bankruptcy. "Very rarely do retail companies emerge from reorganization and bankruptcy," Bentz concluded. They just fade off into the sunset."

Dicks Sporting Goods shares were down 2 percent Wednesday afternoon despite the bad news for its competition.

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