No. 16

Green Consolidates Sport Retailers

Los Angeles buyout firm Leonard Green & Partners orchestrated a merger between two big sporting goods chains in September that is expected to spark increased consolidation in the sports retail industry.

Green announced a deal to merge its Gart Sports Co. with publicly traded Sportmart Inc., and will own 60 percent of the outstanding shares of the new entity. The combined companies, to be known as Gart Sports Co. and based in Denver, will become the second-largest sporting goods chain in the nation, with about 120 stores in 13 Western states and an estimated $700 million in annual revenues.

Because of an increase in the number of sporting goods stores during the late 1980s, expanding competition has resulted in lackluster sales for sports-oriented retailers leading to speculation that the industry will consolidate to achieve economies of scale. With the Gart/Sportmart merger, Green is believed to have started that process.