Larry Perkins of SierraConstellation Partners talks about the bankruptcy of Sports Authority, and how rivals took down this once industry leader. Bobbi Rebell reports.
Sports authority admitting defeat and filing for bankruptcy hearing Martin Lawrence park and he is founder and CEO of the Eric constellation. Partners great to have you. And yet it's they specialize in retail reorganizations now let's talk about sports authority this was once the largest sporting goods retailer what went wrong. I think it's its number different things I think. Probably that the biggest one is the retail environment changed so much and I think on one side. The Amazon's other people world that are delivering boxes every day to my house in anyhow especially. Expert gander mountain or at Ellis of the artery goes specialties that are there eating lunch. Compound that with that Wal-Mart and other please read by exporting its just a typical retail buyer. And they did they do a lot of debt on their books that the question of managing with the debt or is this an execution issue. I think it's it's probably vote I think overwhelmingly. They have less flexibility because debt that's out there. I think it's better part billion dollars in debt on the company and you just don't have the nimble and is the house when your leopard so I think. Compound with the typical retail buyer is just really hard XQ when an albatross around. And it's interesting you say if this were to come across your desk as the company you know proposed to to start right now you wouldn't even think this company should exist in this arm. Let me think viewers saying in a middle of the road retailers it's competitive wit. People have structural advantages like Amazon and people have better footprints like decks which ever released or that business again. So so that wasn't the bankruptcy accomplice and is there come back here. Yet I think they're really probably is despite everything that is that I think. When you look at retailers typically fairly similar dynamic of adding him look really good stores. A bunch that are in the mill an ample real superstars I think we can accomplish in the bankruptcy while it's not very elegant as you can get rid of the bad ones and focus on the good ones basically shrink to fit. What the business really is in this regard in some ways with a balanced he is going into the bankruptcy. That's not going to be easy clunky to get there it was and there's a lot of people go to sports thirty years billions of dollars in sales are people that go there. But there's you have to you have to get business that fits those people going to those stores. So then your specialists in this what is your advice to management from where they aren't now. I think disregard the past a little bit as far as what it was focused on what it is I mean. If Fiat 500 stores there's probably ample of their very good stores let's focus on that they make it great business there and I think what everyone forgets and retailers they were always buys and restores or whatever number it is. At some point they were thunderstorms they're probably making an awful lot of money that's how theories though capital in the first place focus on that get back to what they're good that. Overall hottest sector a look at this a good business to the end. I think if you're the winner in these businesses. You know. Like Dix I think it's probably good but nothing last forever I think in general looking especially you looking at retail optically big box. It's tough. He's seen. RadioShack. Circuit in years ago at least up orders go away is a super competitive business analysts here clear cut winner. I think you're gonna see more of this apparently the can't thank you so much there. Give our thanks to analyze Perkins this year constellation partners and got here about this is writers.