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Dick’s Could Snag as Many as 180 Sports Authority Stores, Analyst Says

One retailer’s failure is another retailer’s treasure.

While that may be a slight variant on the age-old idiom, the message is the same—and Dick’s Sporting Goods, the nation’s largest sports gear retailer, could be the one to gain in Sports Authority’s demise.

Sports Authority filed for bankruptcy in March, originally outlining plans to close just 140 stores, but has since said it would sell off its remaining assets. An auction is scheduled for May 16, but experts said as recently as last week that liquidation isn’t unlikely.

Dick’s is the most likely bidder for those up-for-grabs stores, and analyst Camilo Lyon of New York-based Canaccord Genuity, said the retailer could take on 80 Sports Authority stores, and best-case scenario, possibly as many as 180.

Lyon wrote in a research note to clients Monday that if Dick’s takes on 80 Sports Authority stores that do not have competition within a 10- to 25-mile radius, Dick’s could realize as much as $500 million in incremental sales, The Denver Post reported. According to earlier estimates, Lyon said the 140 stores Sports Authority originally slated to shutter would have resulted in a $370 million sales boost for Dick’s.

Of those 80 stores Dick’s could snag, 42 are reportedly in Colorado, California and Florida.

“We now have three key structural drivers (sales recapture from TSA [The Sports Authority] closures, new stores openings, and e-commerce coming in house in 2017) that should provide a consistent tailwind to both sales and margins for the next to years,” the Post reported Lyon as saying.

For the full year 2015, Dick’s reported net sales up 6.7% to $7.3 billion, thanks in part to new store openings. The company’s first quarter results call is scheduled for May 19. Lyon estimates that Dick’s annual sales could be more than $7.8 billion in 2016 and reaching $8.3 billion in 2017.

Sports Authority is reportedly looking into bids from interested parties in advance of next week’s auction date.