Indianapolis-based The Finish Line (Nasdaq: FINL) has found a new owner for its troubled running specialty unit. The retailer says it has entered into an agreement with a private equity firm in California to sell its once-promising, but now unprofitable JackRabbit business. The JackRabbit brand and its 65 retail locations throughout the country will be property of CriticalPoint Capital LLC in a deal that is slated to close in The Finish Line’s fiscal fourth quarter.
The company announced plans in November to explore options regarding the business, which was previously known as the Running Specialty Group, and had been grown through multiple acquisitions over the past few years. Its earnings report last month showed a fiscal third quarter loss of more than $40 million.
The Finish Line expects pre-tax charges related to the transaction to total between $33 million and $36 million in the fiscal fourth quarter.
Chief Executive Officer Sam Sato says "as we exit the running specialty business, we dedicate our entire focus to serving our core Finish Line and Finish Line Macy’s customers and driving profitable results that provide return to our shareholders. The JackRabbit team – both in their main offices in Denver and throughout the field – genuinely work hard to serve running and fit enthusiasts within their local communities. With CriticalPoint retaining those employees, they will continue to deliver a high level of customer service and offer industry leading branded footwear, apparel and accessories."
Members of the JackRabbit staff will be employed by a CriticalPoint Capital affiliate.
You can read more about the sell-off by clicking here.