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As filed with the Securities and Exchange Commission on January 9, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
GART SPORTS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 84-1242802
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(State or other jurisdiction of (IRS Employer Identification
of incorporation or organization) Number)
1000 Broadway, Denver, Colorado 80203
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(Address of Principal Executive Offices including Zip Code)
Gart Sports Company 1994 Management Equity Plan
Sportmart, Inc. Associate Stock Purchase Plan
Sportmart, Inc. Directors' Stock Option Plan
Sportmart, Inc. Stock Option Plan
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(Full title of plans)
John Douglas Morton
Gart Sports Company
1000 Broadway
Denver, Colorado 80203
(303) 861-1122
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(Name, address and telephone number of agent for service)
Copies to:
Jeffrey M. Knetsch
Brownstein Hyatt Farber & Strickland, P.C.
410 17th Street, 22nd Floor
Denver, Colorado 80202
(303) 534-6335
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed maximum Proposed maximum
Amount to be offering price per aggregate offering Amount of
Title of securities to be registered registered (1) share (2) price (2) registration fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, ($.01 par value) 394,312 shares $ 5.13 $ 2,022,820.56 $ 596.73
Common Stock, ($.01 par value) 185,500 shares $15.00 $ 2,775,000.00 $ 819.63
Common Stock, ($.01 par value) 920,188 shares $ 6.96 $ 6,404,508.48 $ 1,889.33
Common Stock, ($.01 par value) 6,583 shares $12.15 $ 79,983.45 $ 23.60
Common Stock, ($.01 par value) 6,089 shares $15.19 $ 92,491.91 $ 27.29
Common Stock, ($.01 par value) 1,645 shares $16.33 $ 26,862.85 $ 7.92
Common Stock, ($.01 par value) 6,500 shares $17.38 $ 112,970.00 $ 33.33
Common Stock, ($.01 par value) 37,771 shares $17.86 $ 674,590.06 $ 199.00
Common Stock, ($.01 par value) 25,584 shares $19.84 $ 507,586.56 $ 149.74
Common Stock, ($.01 par value) 9,463 shares $20.51 $ 194,086.13 $ 57.26
Common Stock, ($.01 par value) 493 shares $20.51 $ 10,111.43 $ 2.98
Common Stock, ($.01 par value) 1,728 shares $21.27 $ 36,754.56 $ 10.84
Common Stock, ($.01 par value) 5,842 shares $22.03 $ 128,699.26 $ 37.97
Common Stock, ($.01 par value) 7,570 shares $28.86 $ 218,470.20 $ 64.45
Common Stock, ($.01 par value) 23,141 shares $30.38 $ 703,023.58 $ 207.39
Common Stock, ($.01 par value) 32,117 shares $37.22 $ 1,195,394.74 $ 352.64
Common Stock, ($.01 par value) 10,039 shares $44.05 $ 442,217.95 $ 130.45
Common Stock, ($.01 par value) 658 shares $69.57 $ 45,777.06 $ 13.50
Common Stock, ($.01 par value) 1,892 shares $76.74 $ 145,192.08 $ 42.83
Common Stock, ($.01 par value) 2,152 shares $77.47 $ 166,715.44 $ 49.18
Common Stock, ($.01 par value) 987 shares $85.06 $ 83,954.22 $ 24.77
Common Stock, ($.01 par value) 3,290 shares $91.14 $ 299,850.60 $ 88.46
Common Stock, ($.01 par value) 8,229 shares $94.18 $ 775,007.22 $ 228.63
Total 1,691,773 shares --- $ 17,142,068.34 $ 5,057.92
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</TABLE>
(1) Includes an indeterminate number of shares of Gart Sports Company
common stock that may be issuable by reason of stock splits, stock
dividends or similar transactions.
(2) This calculation is made solely for the purpose of determining the
registration fee pursuant to the provision of Rule 457(h) under the
Securities Act of 1933, as amended (the "Act"), as follows: (a) in the
case of (i) shares of Common Stock issued pursuant to the Gart Sports
Company 1994 Management Equity Plan, which are registered for resale,
and (ii) shares of Common Stock for which awards have not yet been
granted and the option price of which is therefore unknown, the fee is
calculated on the basis of the book value of such shares computed as
of the latest practicable date prior to the date of filing this
registration statement and (b) in the case of shares of Common Stock
which may be issued upon the exercise of outstanding options, the fee
is calculated on the basis of the price at which such options may be
exercised.
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EXPLANATORY NOTE
In accordance with the instructional Note to Part 1 of Form S-8 as
promulgated by the Securities and Exchange Commission (the "SEC"), the
information specified by Part 1 of Form S-8 has been omitted from this
Registration Statement on Form S-8 for offers of Common Stock of Gart Sports
Company (the "Company") pursuant to the Gart Sports Company 1994 Management
Equity Plan, Sportmart, Inc. Associate Stock Purchase Plan, Sportmart, Inc.
Directors' Stock Option Plan and Sportmart, Inc. Stock Option Plan
(collectively, the "Plans"). The prospectus filed as part of this Registration
Statement has been prepared in accordance with the requirements of Form S-3 and
may be used for reofferings and resales of unregistered shares of Common Stock
previously acquired pursuant to the Gart Sports Company 1994 Management Equity
Plan and for the reofferings and resales of registered shares of Common Stock
which have previously been issued pursuant to the Plans or may be issued in the
future upon the exercise of options or other awards granted under the Plans
(hereinafter such Prospectus will be referred to as the "Prospectus").
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PROSPECTUS
GART SPORTS COMPANY
1,691,773 Shares of Common Stock
This Prospectus is being used in connection with the offering from
time to time of up to 1,691,773 shares (the "Shares") of common stock, par
value $.01 per share (the "Common Stock"), of Gart Sports Company (the
"Company") by certain stockholders who may be deemed to be affiliates ("Selling
Stockholders") of the Company. The Company will not receive any of the
proceeds from the sale of the Shares.
The Shares may be sold from time to time by the Selling Stockholders
or by pledgees, donees, transferees or other successors in interest. Such
sales may be made on the Nasdaq National Market System ("Nasdaq"), in
negotiated transactions or otherwise, at market prices prevailing at the time
of sale, at prices related to the prevailing market prices or at negotiated
prices. The Shares may be sold in transactions involving broker-dealers,
including: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer for its account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Act") in connection with such sales. All discounts, commissions
or fees incurred in connection with the sale of the Shares will be paid by the
Selling Stockholders or by the purchasers of the Shares, except that the
expenses of preparing and filing this Prospectus and the related Registration
Statement with the Securities and Exchange Commission, and of registering or
qualifying the shares, will be paid by the Company.
The Common Stock of the Company is listed on Nasdaq under the symbol
GRTS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-------------------------
SEE RISK FACTORS FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS IN THE SHARES OFFERED HEREBY.
-------------------------
The date of this Prospectus is
January 9, 1998
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No person is authorized to give any information or to make any
representations, other than as contained herein, in connection with the offer
made in this Prospectus, and any information or representation not contained
herein must not be relied upon as having been authorized by the Company or the
Selling Stockholders. This Prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the Shares offered by
this Prospectus, nor does it constitute an offer to sell or a solicitation of
any offer to buy any Shares offered hereby to any person in any jurisdiction
where it is unlawful to make such an offer or solicitation to such person.
Neither the delivery of this Prospectus nor any sale hereunder shall under any
circumstances create any implication that information contained herein is
correct as of any time subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports and other information filed by the Company with the
Commission may be inspected and copies at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at: 75
Park Place, 14th Floor, New York, New York 10007 and Northwest Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained upon written request addressed to the Commission at
the Public Reference Section, at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. Such reports, proxy
and information statements and other information may be found at the
Commission's web site address, http://www.sec.gov. In addition, the Common
Stock is listed on Nasdaq and reports and other information concerning the
Company may also be inspected at the offices of the National Association of
Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed a registration statement (the "Registration
Statement") on Form S-8 with respect to the Shares offered hereby with the
Commission under the Act. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain items of which are contained in schedules and
exhibits to the Registration Statement as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to
the contents of any agreement, instrument or other document referred to are not
necessarily complete. With respect to each such agreement, instrument or other
document filed as an exhibit to the Registration Statement, reference is made
to the exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.
In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
such person, the Annual Report on Form 10-K, when available, for the Company's
latest fiscal year and a copy of any or all of the documents incorporated
herein by reference other than exhibits to such documents. See "INCORPORATION
OF DOCUMENTS BY REFERENCE." Such requests should be directed to Gart Sports
Company, 1000 Broadway, Denver, Colorado 80203, Attention: Secretary.
INCORPORATION BY REFERENCE
The following documents filed with the SEC are incorporated in this
Registration Statement by reference:
1. The final prospectus portion of the Company's registration statement
on Form S-4, File Number 333-42355, filed with the SEC pursuant to
Rule 424(b).
2. The description of the Common Stock which is contained in the
Company's registration statement filed pursuant to Section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act") and all
amendments thereto and reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the filing of a post-effective amendment indicating that all of the Shares
offered
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hereby have been sold or deregistering all of the Shares that at the time of
such post-effective amendment remain unsold, shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in any documents
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document, which also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
TABLE OF CONTENTS
<TABLE>
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THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . 8
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . 11
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
3
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THE COMPANY
Gart Sports Company (the "Company") is one of the leading sporting
goods retailers in the midwest and western United States and the leading
full-line sporting goods retailer in the Rocky Mountain region in terms of
sales and number of stores. Founded in 1928, the Company operates 122 stores in
Colorado, Utah, Illinois, California, Minnesota, Ohio, Wisconsin, Oregon, Iowa,
Idaho, Wyoming, New Mexico, Montana and Washington. The Company was
incorporated in Delaware in 1993 and operates through its wholly-owned
subsidiaries, Gart Bros. Sporting Goods Company and Sportmart, Inc., which was
acquired by the Company on January 9, 1998. The Company's executive offices
are located at 1000 Broadway, Denver, Colorado 80203, and its telephone number
is (303) 861-1122. The Company's web site is http://www.gartsports.com. This
web site is not part of this Prospectus.
RISK FACTORS
In addition to the other information set forth in this Prospectus,
investors should consider carefully the information set forth below before
making an investment in the Common Stork offered hereby.
COMPETITION
The market for sporting goods retailers is highly fragmented and
intensely competitive. The Company currently competes with a number of
established companies including large format sporting goods stores (such as The
Sports Authority, Oshman's and Jumbo Sports), traditional sporting goods stores
and chains (such as Big 5), specialty sporting goods shops and pro shops (such
as Pro Golf Discount, Foot Locker and REI), and mass merchandisers (discount
stores, department stores and warehouse clubs such as Kmart, Wal-Mart and
Price/Costco). Several of these companies have substantially greater resources
and better name recognition than the Company. Increased competition in markets
in which the Company has stores, the adoption by competitors of innovative
store formats and retail sales methods or the entry of new competitors or the
expansion of operations by existing competitors in the Company's markets could
have a material adverse effect on the Company's business, financial condition
and operating results.
CONTROL BY SIGNIFICANT STOCKHOLDER
Green Equity Investors, L.P. ("GEI") currently holds approximately 61%
of the issued and outstanding shares of the Common Stock. Accordingly, GEI has
the power to elect the Company's Board of Directors and to approve most actions
requiring stockholder approval, including adopting amendments to the Company's
Certificate of Incorporation and approving or disapproving additional sales of
Common Stock by the Company, mergers or sales of all or substantially all of
the assets of the Company. As a result, GEI is able to control all of the
Company's major policy decisions.
INHERENT UNCERTAINTIES RELATING TO THE SPORTMART ACQUISITION
The success of the Company's acquisition of Sportmart, Inc.
("Sportmart") on January 9, 1998 (the "Sportmart Acquisition") in enhancing
long-term stockholder value will depend, in part, on achieving cost savings and
other benefits that could be expected to be realized as a result of the
Sportmart Acquisition. Cost savings and other benefits are expected to be
approximately $6.7 million annually beginning in fiscal 1999 and consist of
enhanced purchasing power and lower administrative costs. The anticipated
benefits of the Sportmart Acquisition may not be achieved unless Sportmart's
business operations are successfully integrated in a timely manner. The
Company expects to incur approximately $4.6 million of integration costs in
fiscal 1998, which will consist primarily of systems reengineering and certain
incentives to retain employees during the integration period. The difficulties
of such integration may initially be increased by the necessity of coordinating
geographically separated organizations and integrating personnel with disparate
corporate cultures. As in every business integration, achieving the benefits
will require the dedication of management resources that will temporarily
detract from attention to the daily business of the Company. This integration
process may cause an interruption of, or a loss of, momentum in the activities
of the Company, which could have a material adverse effect on the revenues and
operating results, at least in the near term. There can be no assurance that
the Company will not incur additional charges to reflect costs associated with
the
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Sportmart Acquisition, nor can there be any assurance that the Company will be
able to realize the anticipated benefits of the Sportmart Acquisition, or to do
so within any particular period.
POTENTIAL IMPACT ON LIQUIDITY OF INCOME TAX CONTINGENCY
On July 24, 1997, the Internal Revenue Service ("IRS") proposed
adjustments to the 1992 and 1993 consolidated federal income tax returns of the
Company and its former parent, TCH Corporation, now Thrifty PayLess Holdings,
Inc. ("Thrifty"), in conjunction with Thrifty's IRS examination. The proposed
adjustments relate to the manner in which LIFO inventories were characterized
on such returns. The Company was a wholly-owned indirect subsidiary of Thrifty
until April 20, 1994 and responsible for its share of taxes on a separate
return basis under a tax sharing agreement with Thrifty. The Company recorded
approximately $9.7 million as a long-term net deferred tax liability for the
tax effect of the LIFO inventory basis difference. The IRS has asserted that
this basis difference should be reflected in taxable income in 1992 and 1993.
The Company has taken the position that the inventory acquired in connection
with the acquisition of Thrifty was appropriately allocated to its inventory
pools. The IRS has asserted the inventory was acquired at a bargain purchase
price and should be allocated to a separate inventory pool and liquidated as
inventory turns.
Based on the Company's discussions with Thrifty, the Company believes
the potential accelerated tax liability, which could have a negative effect on
liquidity in the near term, ranges from approximately $2.5 million to $9.7
million. The range of loss from possible assessed interest charges resulting
from proposed adjustments by the IRS range from approximately $460,000 to $3
million. As the Company believes that no amount is more probable than another
within the range, the minimum interest exposure of $460,000 has been accrued in
the Company's consolidated financial statements. No penalties are expected to
be assessed relating to this matter. At October 4, 1997, the LIFO inventory and
other associated temporary differences continue to be classified as long-term
net deferred tax liabilities as the Company does not believe the matter will be
resolved within a year.
While the Company believes that it has adequately provided for any
liability that may arise from this matter, there can be no assurance that any
additional liability beyond the amounts recorded will not arise as a result of
the IRS examination. The actual liability that may arise from the matter could
have a material adverse effect on the Company's liquidity, which could have a
material adverse effect on the Company's business, financial condition and
operating results.
SUBSTANTIAL LEVERAGE
Following the Sportmart Acquisition, the Company has consolidated
indebtedness that is substantial in relation to its stockholders' equity and
significantly greater than the Company's previous indebtedness prior to
consummation of the Sportmart Acquisition. After giving effect to the
Sportmart Acquisition, on a pro forma basis, as of October 4, 1997, the Company
had $112.8 million of total debt and $71.4 million of stockholders' equity. The
Company has refinanced the combined indebtedness of the Company and Sportmart
with an asset-based credit facility of $175 million. This level of
indebtedness has several important consequences, including: (i) a substantial
portion of the Company's cash flow from operations must be dedicated to debt
service requirements, will not be available for other purposes and will
decrease its profitability; (ii) the Company's ability to obtain additional
financing for working capital, capital expenditures or acquisitions may be
impaired; (iii) the Company's leverage may increase its vulnerability to
economic downturns and limit its ability to withstand competitive pressures;
and (iv) the Company's ability to capitalize on significant business
opportunities may be limited.
The Company believes that its cash flow from operations, together
with its other available sources of liquidity, will be adequate to make
required payments of principal and interest on its indebtedness, to permit
anticipated capital expenditures and to fund working capital requirements. If
the Company is unable to generate sufficient cash flow from operations in the
future, it may be required to refinance all or a portion of its existing
indebtedness or to obtain additional financing. There can be no assurance that
any such refinancing would be possible or that any additional financing could
be obtained on terms that are acceptable to the Company.
POTENTIAL ADVERSE EFFECTS OF FAILURE TO RESPOND TO MERCHANDISING TRENDS
The Company's success depends to a large degree on its ability to
provide a merchandise selection that appeals to its customers' changing desires
and that appropriately reflects geographical differences in merchandise
preferences. The Sportmart Acquisition will provide the added challenge of the
combined organization learning to buy for different geographic markets. The
Company often makes commitments to its vendors to purchase merchandise several
months in advance of the proposed delivery date and therefore must anticipate
and respond to changing merchandise trends and consumer demand in a timely
manner. Accordingly, any failure by the Company to identify and respond to
emerging trends, or to obtain high-demand sporting goods products, could
adversely affect consumer acceptance of the merchandise in the Company's
stores, which, in turn, could have a material adverse effect on the Company's
business, financial condition and operating results. If the Company
miscalculates either the market for the merchandise in its stores or its
customers' purchasing preferences and market trends, the Company may be faced
with a significant amount of unsold inventory, which could have an adverse
effect on the Company's business, financial condition and operating results.
5
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POTENTIAL ADVERSE EFFECT OF CHANGES IN VENDOR RELATIONSHIPS
The Company purchases merchandise from over 1,000 vendors. In fiscal
1996, Nike, the largest vendor for both the Company and Sportmart, represented
approximately 8.6% and 20%, respectively, of total purchases. No other vendor
represented more than 5% of total purchases by the Company or Sportmart.
Although the Company believes that current relationships with its vendors are
generally good, there can be no assurance that these relationships will not
change following consummation of the Sportmart Acquisition. The Company does
not have long-term contracts with any vendor. Moreover, certain merchandise
for which there is significant demand may be allocated by vendors based upon
the vendors' internal criteria which is beyond the Company's control. Any
disruption in the Company's relationship with its vendors, particularly those
whose sporting goods products are in high demand, or any inability to obtain
merchandise from existing or new vendors in the future, could have a material
adverse effect on the Company's business, financial condition and operating
results.
SEASONALITY; DEPENDENCE ON WINTER SELLING SEASON
The Company's business is seasonal in nature, with its highest sales
levels and operating profitability historically occurring during the fourth
fiscal quarter, which includes the holiday selling season. This seasonality is
also due, in part, to the Company's strong sales of cold weather sporting
goods and apparel. For fiscal years 1995 and 1996, the fourth quarter
contributed 33.7% and 32.7%, respectively, of net sales, and 204.0% and 80.2%,
respectively, of operating income. In fiscal 1995 and 1996, sales and rentals
of winter sports equipment and apparel accounted for 22.6% and 23.2%,
respectively, of the Company's net sales for these fiscal years. Any decrease
in sales for such period, whether due to a slow holiday selling season, poor
snowfall in ski areas near the Company's markets or otherwise, could have a
material adverse effect on the Company's business, financial condition and
operating results for the entire fiscal year. Further, as a result of the
seasonality of the Company's revenue, the Company may experience net losses in
the second and third fiscal quarters of each year for the foreseeable future.
Inventory levels, which gradually increase beginning in April, generally reach
their peak in November and then fall to their lowest level following the
December holiday season.
The second and fourth fiscal quarters, which respectively include
Father's Day and Christmas, have historically contributed the greatest volume
of net sales and income before taxes to Sportmart. For fiscal years 1996 and
1995, the second and fourth fiscal quarters combined accounted for
approximately 56% and 58%, respectively, of Sportmart's fiscal year net sales.
In both fiscal 1996 and 1995, the fourth fiscal quarter was significantly
impacted by nonrecurring charges and, in addition, the fourth quarter of fiscal
1995 was impacted by discontinued operations; however, typically, the second
and fourth quarters have accounted for substantially all of Sportmart's income
before taxes. In contrast, Sportmart has consistently experienced net losses
in the third quarter and it anticipates that such trend may continue through
fiscal 1997. Inventory levels, which gradually increase beginning in February,
generally reach their peak in November and then fall to their lowest level
following the December holiday season.
POTENTIAL FLUCTUATIONS IN COMPARABLE STORE SALES
A variety of factors could affect the Company's comparable store
sales, including actions of competitors (such as the opening of additional
stores in the Company's markets), the retail sales environment, general
economic conditions, weather conditions and the Company's ability to execute
its business strategy effectively. Also, opening additional stores in market
areas where the Company has already opened stores may reduce sales at existing
the Company stores in that area. Factors such as increased competition and
economic trends in the Company's markets may result in future comparable store
sales increases lower than those experienced in fiscal 1996. Moreover, there
can be no assurance that comparable store sales for any particular period will
not decrease in the future. As is the case with many retailers, the Company's
comparable store sales results could cause the price of the Company's Common
Stock to fluctuate substantially.
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<PAGE> 10
POTENTIAL CONFLICTS OF INTEREST
Certain of Sportmart's former directors, officers and principal
stockholders own interests in various entities from which Sportmart leases
certain properties and Sportmart has made certain advances of funds to these
entities. In connection with the Sportmart Acquisition, the Company has
guaranteed Sportmart's obligations under those leases. Such ownership could
result in conflicts of interest for such former directors, officers and
stockholders in situations where Sportmart's and the Company's interests and
those of such other entities are not identical.
DEPENDENCE ON MANAGEMENT INFORMATION SYSTEMS
In 1995, the Company installed new management information systems,
including sales reporting, financial reporting and inventory management systems.
Sportmart currently uses many of the same management information systems and
vendors. However, although major platforms and significant vendors are the
same, there remain significant risks to the smooth integration of Sportmart's
management information systems into those of the Company. The Company will need
to continually evaluate the adequacy of its management information systems and
in the future may need to upgrade such systems to support the integration of
Sportmart stores into the Company's operating systems and to be prepared for
necessary systems conversion for year 2000 compliance. All management
information systems are currently being reviewed for year 2000 compliance. The
costs of such compliance could be significant. Certain of the Company's
suppliers may also be impacted by year 2000 compliance, which, in turn, could
impact the Company. No assurance can be given that the steps necessary for such
compliance will not be disruptive to the Company's operations or that they will
not have a material adverse effect on the Company's business, financial
condition or operating results. In addition, the Company currently relies on a
small number of outside vendors for the software and support of its management
information systems. While the Company has taken a number of precautions
against certain events that could disrupt the operation of its management
information systems, there can be no assurance that the Company will not
experience systems failures or interruptions, which could have a material
adverse effect on the Company's business, financial condition and operating
results.
DEPENDENCE ON KEY PERSONNEL
The Company believes that the loss of the services of John Douglas
Morton, its Chairman of the Board, President and Chief Executive Officer, or
any of the Company's other executive officers, could have a material adverse
effect on the Company's business, financial condition and operating results.
The Company does not have employment agreements with Mr. Morton or any other
senior executive, nor does the Company maintain "key man" life insurance on any
of its officers.
POTENTIAL IMPACT OF PRODUCT LIABILITY
The Company may be exposed to potential losses arising from product
liability claims with respect to the sporting goods equipment and other
products that the Company sells. Although the Company currently believes its
insurance coverage is adequate, there can be no assurance that the Company will
not be forced to bear substantial losses from such claims in excess of its
liability coverage. The Company has entered into indemnity agreements with
many of its vendors with respect to certain product liability claims; however,
there can be no assurance that the Company will be able to collect sufficient
payments under these indemnity agreements to offset losses suffered as a result
of product liability claims. Substantial claims resulting from product
liability suits could have a material adverse effect on the Company's business,
financial condition and operating results.
POTENTIAL DILUTIVE EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE
Immediately following the consummation of the Sportmart Acquisition,
the Company had outstanding approximately 7,680,000 shares of Common Stock. A
significant number of such shares, including shares held by certain holders of
Common Stock prior to the Sportmart Acquisition, will be eligible for sale
without restriction under the Securities Act in the public market after the
consummation of the Sportmart Acquisition by persons other than affiliates of
the Company. Sales of shares by former affiliates of Sportmart will be subject
to Rule 145 of the Securities Act (or Rule 144 in the case of such persons who
become affiliates of the Company) or as otherwise permitted under the Securities
Act. In addition, certain stockholders of the Company will have rights to
require the Company to register the sale of
7
<PAGE> 11
such holders' shares of Common Stock under the Securities Act or, in some cases,
to register the sale of shares in other registration statements filed by the
Company in respect of sales of shares by it or by others.
NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
Prior to the Sportmart Acquisition, there had been no public market
for the Company's Common Stock. Accordingly, there may be significant
volatility in the market price for the Company's Common Stock, and there can be
no assurance that following the Sportmart Acquisition an active public market
for the Company's Common Stock will develop or be sustained. The Company
believes that future announcements concerning the Company, its competitors or
the sporting goods industry generally, seasonal or quarterly variations in
operating results or same store sales, changes in product mix or prices by the
Company or its competitors, weather patterns or economic trends that may be
perceived to affect the demand for the Company's products, changes, or
anticipated changes, in earnings estimates by analysts or changes in accounting
policies, general economic conditions and conditions on national stock
exchanges, among other factors, could cause the market price of the Company's
Common Stock to fluctuate substantially.
POSSIBLE ANTI-TAKEOVER EFFECT OF CHARTER, BYLAWS AND DELAWARE LAW PROVISIONS
Certain provisions of the Company's Amended and Restated Certificate
of Incorporation and Amended and Restated Bylaws may have the effect of making
it more difficult for a third party to acquire, or of discouraging a third
party from attempting to acquire, control of the Company. Such provisions
could limit the price that certain investors might be willing to pay in the
future for shares of Common Stock. Certain of these provisions allow the
Company to issue authorized but unissued shares of preferred stock without any
vote or further action by the stockholders. These provisions could have the
effect of diluting current stockholders' ownership interests in the Company,
may make it more difficult for stockholders to take certain corporate actions,
including replacing incumbent management, and could have the effect of delaying
or preventing a change in control of the Company. Moreover, certain provisions
of Delaware law applicable to the Company could also delay or make more
difficult a merger, tender offer or proxy contest involving the Company. Such
provisions include Section 203 of the Delaware General Corporation Law, which
prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years unless certain
conditions are met. In addition, so long as GEI is the majority stockholder of
the Company, third parties will not be able to obtain control of the Company
through purchases of Common Stock not owned by GEI.
SELLING STOCKHOLDERS
The names of the Selling Stockholders who may be affiliates of the
Company and the positions, offices and other material relationships which each
Selling Stockholder has had with the Company since January 1, 1995 are as
follows:
<TABLE>
<CAPTION>
Position held or Relationship with the Company Since
Selling Stockholder January 1, 1995
- ------------------- ----------------------------------------------------
<S> <C>
John Douglas Morton President, Chief Executive Officer and Chairman of the
Board (Director)
David J. Nace Executive Vice President, Chief Financial Officer and
Treasurer
Arthur S. Hagan Senior Vice President -- Store Operations
Thomas B. Nelson Vice President -- Real Estate/Legal/Construction and
Secretary
Kenneth T. Snyder Vice President -- Merchandise Manager
Robert M. Chessen Senior Vice President -- Human Resources and
Distribution
Stephen F. Wilbur Vice President -- Merchandise Manager
Frances N. Victor Vice President -- Advertising & Marketing
</TABLE>
8
<PAGE> 12
<TABLE>
<CAPTION>
Position held or Relationship with the Company Since
Selling Stockholder January 1, 1995
- ------------------- ----------------------------------------------------
<S> <C>
Janis Pollard Regional Manager
David Frieder Director of Construction and Facilities
Joseph Walker Regional Manager
Gloria-Jean Healy Director of Human Resources
Tim Dezember District Manager
William McCall Merchandise Manager
Bernie Ponder District Manager (until August 1997)
Nancy Harwood District Manager
Richard Kohler District Manager
Brian Martelon Merchandise Manager
Steve Dunlap Merchandise Manager
Phillip Hess District Manager
</TABLE>
9
<PAGE> 13
The following table sets forth for each Selling Stockholder listed
above, the number of shares of Common Stock of each such Selling Stockholder
which (1) are issued and owned beneficially or of record as of January 9, 1998;
(2) are not issued, but may be acquired pursuant to the Plans; (3) are being
offered pursuant to the Registration Statement; and (4) are to be owned after
completion of the offering, assuming that all Shares offered hereby are sold:
<TABLE>
<CAPTION>
Amount of
Shares to be
Number of Issued Number of Shares Owned After
Shares Owned as Which May Be Number of Sales of Shares
of January 9, Acquired Pursuant Shares to be Registered
Name 1998 to Plans (1) Offered Hereunder
- -------------------------- ---------------- ----------------- ------------- ----------------
<S> <C> <C> <C> <C>
John Douglas Morton 32,000 196,000 228,000 -0-
David J. Nace 32,000 47,000 79,000 -0-
Arthur S. Hagan 15,000 44,000 59,000 -0-
Thomas B. Nelson 11,000 35,000 46,000 -0-
Kenneth T. Snyder 11,000 35,000 46,000 -0-
Robert M. Chessen 4,000 28,000 32,000 -0-
Stephen F.Wilbur 3,000 25,000 28,000 -0-
Frances N. Victor 1,000 20,000 21,000 -0-
Janis Pollard 6,000 15,000 21,000 -0-
David Frieder 5,000 11,500 16,500 -0-
Joseph Walker 2,000 11,000 13,000 -0-
Gloria-Jean Healy 1,000 12,000 13,000 -0-
Tim Dezember 2,000 3,500 5,500 -0-
William McCall 2,000 5,000 7,000 -0-
Bernie Ponder 2,000 3,500 5,500 -0-
Nancy Harwood 2,000 3,500 5,500 -0-
Richard Kohler 2,000 3,500 5,500 -0-
Brian Martelon 2,000 5,000 7,000 -0-
Steve Dunlap 1,000 4,500 5,500 -0-
Phillip Hess 1,000 2,500 3,500 -0-
Other Shareholders (2) 6,600 33,300 39,900 -0-
------------------ ----- ------ ------ ---
Totals 143,600 586,800 730,400 -0-
</TABLE>
- ---------------------
(1) Shares underlying both vested and unvested options granted, some of
which options are currently exercisable.
(2) Includes all non-affiliates who individually hold less than 1000
shares issued under the Plan.
The preceding table reflects all Selling Stockholders who are eligible
to reoffer and resell Shares, whether or not they have a present intent to do
so. There is no assurance that any of the Selling Stockholders will sell any
or all of the Shares offered by them hereunder. The inclusion in the foregoing
table of the individuals named therein shall not be deemed to be an admission
that any such individuals are "affiliates" of the Company.
This Prospectus may be amended or supplemented from time to time to
add or delete Selling Stockholders.
10
<PAGE> 14
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders
or by pledgees, donees, transferees or other successors in interest. Such
sales may be made on Nasdaq, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale, at prices related to the prevailing
market prices or at negotiated prices. The Shares may be sold in transactions
involving broker-dealers, including: (a) a block trade in which the broker or
dealer so engaged will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; (b)
purchases by a broker or dealer for its account pursuant to this Prospectus;
and (c) ordinary brokerage transactions and transactions in which the broker
solicits purchases. In effecting sales, brokers or dealers engaged by the
Selling Stockholders may arrange for other brokers or dealers to participate.
Brokers or dealers will receive commissions or discounts from Selling
Stockholders in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers may be deemed
to be "underwriters" within the meaning of the Act in connection with such
sales. In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144 under the Act may be sold under Rule 144 rather
than pursuant to this Prospectus. The Company will not receive any of the
proceeds from the sale of the Shares. The Company has paid the expenses of
preparing this Prospectus and the related Registration Statement. The Selling
Stockholders have been advised that they are subject to the applicable
provisions of the Exchange Act, including without limitation, Rule 10b-5
thereunder.
LEGAL MATTERS
Legal matters with respect to Common Stock being offered hereby have
been passed upon for the Company by Brownstein Hyatt Farber & Strickland, P.C.,
Denver, Colorado.
EXPERTS
The consolidated financial statements of the Company as of January 6,
1996 and January 4, 1997, and for the year ended December 31, 1994, the
fifty-three weeks ended January 6, 1996, and the fifty-two weeks ended January
4, 1997, have been incorporated by reference herein and in the Registration
Statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated balance sheets of Sportmart as of January 28, 1996
and February 2, 1997 and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the three fiscal years in the
period ended February 2, 1997, have been incorporated by reference herein and
in the Registration Statement in reliance upon the report of Coopers & Lybrand
L.L.P., independent certified public accountants, given on the authority of
that firm as experts in accounting and auditing.
11
<PAGE> 15
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the SEC are incorporated in this
Registration Statement by reference:
1. The Company's final prospectus portion of the Company's registration
statement on Form S-4, File Number 333-42355, filed with the SEC
pursuant to Rule 424(b) containing audited financial statements for
the fiscal years ended January 4, 1997, January 6, 1996 and December
31, 1994.
2. The description of the Company's Common Stock which is contained in
the Company's registration statement filed pursuant to Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act") and all
amendments thereto and reports filed for the purpose of updating such
description.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
registration statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated in this registration statement by reference and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement.
The Company hereby undertakes to provide without charge to each person
who has received a copy of a prospectus to which this registration statement
relates, upon the written or oral request of any such person, a copy of any or
all the documents that have been or may be incorporated by reference into this
registration statement, other than exhibits to such documents (unless such
exhibits are incorporated therein by reference). The Company hereby further
undertakes to deliver or cause to be delivered to all participants who have an
interest through a Plan in Common Stock (and any other participants who request
such information orally or in writing) who do not otherwise receive such
material, copies of all reports, proxy statements and other communications
distributed by the Company to its stockholders generally, no later than the
time such materials are first sent to its stockholders.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that no director shall be liable personally to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, provided that, the Certificate does not eliminate the liability
of a director for (i) any breach of the director's duty of loyalty to the
Company or its stockholders; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) acts or
omissions in respect to certain unlawful dividend payments or stock redemptions
or repurchases; or (iv) any transaction from which such director derives
improper personal benefit. The effect of this provision is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent to grossly negligent behavior) except in the
situations described in clauses (i) through (iv) above. The limitations
summarized above, however, do not affect the ability of the Company or its
stockholders to seek non-monetary based remedies, such as an injunction or
rescission,
II-1
<PAGE> 16
against a director for breach of his fiduciary duty. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Company's Certificate and the Company's Amended and Restated
Bylaws (the "Bylaws") provide that the Company shall indemnify and advance
expenses to the currently acting and former directors, officers, employees and
agents of the Company or another corporation, partnership, joint venture,
trust, association or other enterprise if serving at the request of the Company
arising in connection with their acting in such capacities. In addition,
Section 145 of the Delaware General Corporation Law permits the Company to
indemnify an officer or director who was or is a party or is threatened to be
made a party to any proceeding because of his or her position, if the officer
or director acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interest of the Company and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
The Sportmart, Inc Stock Option Plan provides that the Company will
indemnify the Company's directors, the Plan Committee and the Company's
officers and agents for liabilities incurred with respect to their
administration of such Plan.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The restricted securities not acquired under a registration statement
filed under the Act which are to be reoffered or resold pursuant to this
registration statement were originally issued by the Company pursuant to the
exemption from registration provided by Section 4(2) of the Act to the Selling
Shareholders, who at the time of issuance were officers or key employees of the
Company. Each of the Selling Shareholders had access to adequate information
prior to his purchase of stock as a result of a business relationship with the
Company. In addition, at the time of purchase, each Selling Shareholder
represented that he was acquiring such securities for his own account for
investment, without any present intention of selling or further distributing
the same.
ITEM 8. EXHIBITS.
4.1 Gart Sports Company 1994 Management Equity Plan (incorporated
herein by reference to Exhibit 10.5 to the Company's
Registration Statement on Form S-4, File Number 333-42355).
4.2 Sportmart, Inc. Associate Stock Purchase Plan (incorporated
herein by reference to Exhibit 10.19 to Sportmart's Report on
Form 10-K filed with the SEC on April 29, 1993).
4.3 Sportmart, Inc. Directors' Stock Option Plan (incorporated
herein by reference to Exhibit 10.1 to Sportmart's
Registration Statement on Form S-1, File Number 33-50726).
4.4 Sportmart, Inc. Stock Option Plan (incorporated herein by
reference to Exhibit 10.1 to Sportmart's Registration
Statement on Form S-1, File Number 33-50726).
4.5 Amended and Restated Certificate of Incorporation of the
Company (incorporated herein by reference to the Company's
Registration Statement on Form S-4, File Number 333-42355).
4.6 Amended and Restated Bylaws of the Company (incorporated
herein by reference to the Company's Registration Statement on
Form S-4, File Number 333-42355).
5 Opinion of Brownstein Hyatt Farber & Strickland, P.C. as to
the legality of the shares of Common Stock being offered under
the Plan. See also undertaking number 4 in Item 9 of this
Form S-8.
24.1 Consent of KPMG Peat Marwick LLP.
24.2 Consent of Coopers & Lybrand L.L.P.
II-2
<PAGE> 17
25 Power of Attorney (included on the signature page of this
Registration Statement).
ITEM 9. UNDERTAKINGS.
1. The Company hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually, or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
2. The Company hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment and each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of the
Company and subsidiary companies pursuant to the foregoing provisions, or
otherwise, the Company has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
4. The Company undertakes that it will submit or has submitted
the Plans and any amendments thereto to the Internal Revenue Service in a
timely manner and has made or will make all changes required by the Internal
Revenue Service in order to qualify the Plans under Section 401 of the Internal
Revenue Code.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, and State of Colorado, on the 9th day of
January, 1998.
GART SPORTS COMPANY
By: /s/ John Douglas Morton
--------------------------------------
John Douglas Morton
Chairman of the Board, President and
Chief Executive Officer
NOW ALL MEN BY THESE PRESENTS that each person whose signature appears below
constitutes and appoints John Douglas Morton and Thomas B. Nelson, and each of
them, as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign and file any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as each might or could do in person, hereby ratifying and confirming
each act that said attorneys-in-fact and agents may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities, on the
9th day of January, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<S> <C>
/s/ John Douglas Morton Chairman of the Board, President and Chief Executive
- ------------------------------------------------- Officer (Principal Executive Officer)
John Douglas Morton
/s/ David J. Nace Executive Vice President, Chief Financial Officer and
- ------------------------------------------------- Treasurer (Principal Financial Officer and
David J. Nace Principal Accounting Officer)
/s/ Jonathan D. Sokoloff Director
- -------------------------------------------------
Jonathan D. Sokoloff
/s/ Jennifer Holden Dunbar Director
- -------------------------------------------------
Jennifer Holden Dunbar
</TABLE>
II-4
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Gart Sports Company 1994 Management Equity Plan (incorporated
herein by reference to Exhibit 10.5 to the Company's
Registration Statement on Form S-4, File Number 333-42355).
4.2 Sportmart, Inc. Associate Stock Purchase Plan (incorporated
herein by reference to Exhibit 10.19 to Sportmart's Report on
Form 10-K filed with the SEC on April 29, 1993).
4.3 Sportmart, Inc. Directors' Stock Option Plan (incorporated
herein by reference to Exhibit 10.1 to Sportmart's
Registration Statement on Form S-1, File Number 33-50726).
4.4 Sportmart, Inc. Stock Option Plan (incorporated herein by
reference to Exhibit 10.1 to Sportmart's Registration
Statement on Form S-1, File Number 33-50726).
4.5 Amended and Restated Certificate of Incorporation of the
Company (incorporated herein by reference to the Company's
Registration Statement on Form S-4, File Number 333-42355).
4.6 Amended and Restated Bylaws of the Company (incorporated
herein by reference to the Company's Registration Statement on
Form S-4, File Number 333-42355).
5 Opinion of Brownstein Hyatt Farber & Strickland, P.C. as to
the legality of the shares of Common Stock being offered under
the Plan. See also undertaking number 4 in Item 9 of this
Form S-8.
24.1 Consent of KPMG Peat Marwick LLP.
24.2 Consent of Coopers & Lybrand L.L.P.
25 Power of Attorney (included on the signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
Exhibit 5
[BROWNSTEIN HYATT FARBER & STRICKLAND, P.C. LETTERHEAD]
January 9, 1998
Gart Sports Company
1000 Broadway
Denver, Colorado 80203
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") filed today with the Securities and Exchange
Commission by Gart Sports Company, a Delaware corporation (the "Company"), in
connection with the registration under the Securities Act of 1933, as amended
(the "Act"), of 1,691,773 shares (the "Shares") of the Company's Common Stock,
par value $.01 per share, to be issued under the Plans (as defined in the
Registration Statement).
In connection with this opinion, we have examined such documents,
certificates, instruments and other records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein. In our examination,
we have assumed the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such copies. Additionally, we have examined such questions of law and fact as
we have considered necessary or appropriate for purposes of this opinion.
Based upon the foregoing, it is our opinion that all of the Shares
have been duly authorized, and when issued and delivered in accordance with the
terms of the appropriate Plan, will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the prospectus that is a part of the Registration Statement. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Act.
Very truly yours,
BROWNSTEIN HYATT FARBER & STRICKLAND, P.C.
<PAGE> 1
EXHIBIT 24.1
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
GART SPORTS COMPANY:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the registration statement.
KPMG PEAT MARWICK LLP
Denver, Colorado
January 8, 1998
<PAGE> 1
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement of Gart Sports
Company on Form S-8 of our report dated March 18, 1997, on our audits of the
consolidated balance sheets of Sportmart, Inc. as of February 2, 1997 and
January 28, 1996, and on the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the years in the three-year
period ended February 2, 1997. We also consent to the references to our firm
under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
January 7, 1998
