LA CAÑADA, Calif. (BRAIN) — The owner of Eastern Mountain Sports and Bob's Stores has agreed to buy the California-based retail chain Sport Chalet.
Vestis Retail Group has agreed to make a cash tender offer of $1.20 for all the outstanding Class A and Class B shares of Sport Chalet, which is now traded on NASDAQ. The agreement means Vestis will pay about $17 million and assume about $50 million in debt to acquire Sport Chalet. Vestis Retail is owned by Versa Capital Management, a private equity investment firm with more than $1.4 billion of assets under management.
Sport Chalet has about 50 stores in Arizona, California, Nevada and Utah, and sells bikes from brands including Haro, Electra, Diamondback, KHS, Pure Fix and Advance Sports International's Fuji and SE Bikes. The stores also provide bicycle service and car rack installation. The chain started in 1959 when Norbert and Irene Olberz bought a ski and tennis shop in La Cañada Flintridge, California.
Vestis' two current retail brands are based in the Northeast. Bob's is a 60-year-old retailer of value-oriented footwear, apparel and work wear. EMS is the second largest U.S. multi-channel retailer of outdoor sports apparel and equipment, with about 68 stores and 11 outdoor adventure schools. EMS sells bikes and bike accessories at some of its locations. Its website shows bikes from Kona, Felt, Marin, Orbea, Masi, Bianchi and Jamis, which are available in some EMS store locations.
According to Vestis, the combination of the three retail chains will create one of the largest sporting goods retailers in the U.S., with more than 150 stores and $800 million in total sales last year.
"The new Vestis, through its three distinct brands, will have a national footprint and offer an impressive assortment of branded technical, performance and lifestyle merchandise, and customer and specialty services combined with a unique and scalable online presence," the company said in a press release Wednesday.
The company said all three chains would continue to operate under their current name.
Craig L. Levra, Chairman of the Board, CEO and president of Sport Chalet, will remain in his position as CEO at Sport Chalet and continue to run this business out of Los Angeles, reporting to Vestis CEO Mark Walsh.
On Tuesday, Sport Chalet reported a 4.8 percent drop in net sales for its fiscal year ended March 30, largely attributed to $10.1 million decrease in comparable-store sales and the closure of four underperforming stores. The company’s net loss deepened to $10.1 million, compared with a loss of $3.3 million in fiscal 2013.