The Finish Line Inc. has reached an agreement to sell its unprofitable JackRabbit chain of specialty running shoe stores to a Los Angeles-based investment firm.
The sale of the 65-store chain to CriticalPoint Capital LLC is expected to close by the end of February, the Indianapolis-based retailer of athletic footwear and apparel announced late Thursday.
"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," Finish Line CEO Sam Sato said in a press release.
Terms of the transaction were not released. But Finish Line acknowledged it will take a financial hit. In connection with the divestiture, the company said it plans to record a pretax charge of $33 million to $36 million in its fiscal fourth quarter, which ends in late February.
JackRabbit generates about $90 million in annual revenue and operates stores in 17 states and the District of Columbia under more than a dozen names. Outposts in Broad Ripple, Carmel, Fishers and Greenwood use the Blue Mile moniker.
Finish Line spent tens of millions of dollars to launch JackRabbit by buying up small, regional running stores, starting with the purchase of an 18-store chain in 2011.
But the shine has come off the high-end running shoe market. Consumers have gravitated toward less technical sneakers, and long-distance races are battling declining participation rates.
Finish Line in November confirmed a two-week-old report that it was looking to rid itself of the underperforming chain.
Finish Line operates about 980 locations in U.S. malls and inside Macy’s department stores.
Shares of Finish Line closed Thursday at $17.32, down 28 cents for the day. The stock has shed 29 percent of its value since reaching a 52-week high of $24.52 in early December.