Finish Line announced that it will take a $44 million charge related to the process of searching for buyers of JackRabbit.

Finish Line could struggle to find a buyer for its specialty running business JackRabbit, industry analysts told the TheStreet Monday.

The Indianapolis-based athletic shoe retailer announced that it is exploring options for the company, which could include a sale, and that it will take up to a $44 million charge as it goes through this process.

Finish Line hired M&A investment banking advisory firm Peter J. Solomon Co. to explore a sale. The firm has worked on a number of high profile deals, recently, advising the sale of headphone-maker Skull Candy to Mill Road Capital for $165 million, as well as the failed $6.3 billion merger between Office Depot and Staples.

“The challenges Finish Line faces in finding a buyer are multiple,” Steve Goldberg of retail consultancy firm The Grayson Company told TheStreet. “What JackRabbit is worth at the end of the day will dictate whether Finish Line can find a buyer. And JackRabbit is struggling.”

Finish Line CEO Sam Sato named JackRabbit as one of the company’s four key priorities during its second quarter earnings call in September. Then last week, the company announced that it was shopping the brand. Neither Finish Line or Peter J. Solomon were available for comment

Without speculating on specific companies, Goldberg told TheStreet that he believes JackRabbit could be a good fit with an established strategic retailer that could seamlessly plug JackRabbit’s business into its operations. Another potential suitor Goldberg sees is an online retailer looking to expand with up to 70 of JackRabbit’s established storefronts.

Finish Line first entered the specialty running business in 2011 when it bought an 18-store chain for $8.5 million. At the time, CEO Glenn Lyon said that the diversification was part of the company’s strategic plan to drive growth outside of its core business. But specialty running shoes is “not a core competency,” of the company, according to Susquehanna Financial Group analyst Sam Poser.

“The skill set to sell to that consumer is not something Finish Line has proven to poses,” Poser told TheStreet in a phone interview. “In this environment, any retailer has to be firing on all cylinders before they can step out and try something new.”

Poser downgraded Finish Line’s stock to “neutral” Monday, saying that the fact that the company does not have a timetable for the sale of JackRabbit is leading to uncertainty surrounding the stock. Despite that, Poser anticipates the company either selling or shutting down JackRabbit by the end of the fiscal year in February.

Finish Line shares closed down 3.21% to $22.91 on Monday.

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“I have known Kevin for more than 30 years,” said Bob Grayson. “Over the last 12 years we have worked side-by-side, leading the business to its current position as a premiere consulting firm focusing on all aspects of consumer and retail businesses.”

“Bob founded the company with the idea that a consulting firm should have both firsthand experience with running a business and a personalized, highly-operational approach,” said Kevin. “I believe that the company’s remarkable growth is a testament to the work of the individuals that make up this truly talented team.”

Kevin has an extensive background in merchandising ranging from department stores to specialty stores.  As alum of the famed Macy’s (Federated) training program he quickly rose to Divisional Merchandise Manager.  He joined the men’s specialty store chain Club International as Chief Merchandising and Marketing Officer, guiding its turnaround to profitability and preparing the company for the subsequent sale to a large specialty retail company.  His creativity and management skills landed him at Tommy Hilfiger, where he worked as Senior Vice President of Retail Development. During his tenure with Tommy, the company grew from $200 million to over $2 billion. Kevin has become a commentator on a wide range of retail topics, representing The Grayson Company on national print and broadcast media.

“We do more than consult,” said Kevin.  “We are full service partners with our clients–this mindset is what makes us different. Going forward, I am confident that our unique approach will position us to innovate and adjust to new technologies and the ever expanding channels of potential product distribution.”

“I have total confidence in Kevin’s talent, experience and skills. He is an excellent leader and the ideal candidate to take the company to new heights,” said Bob Grayson.

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Mullaney highlighted custom mobile technology implemented by The Science Project last holiday season, which drew passersby into the ‘Yeti’s igloo’ in Saks Fifth Avenue’s flagship window displays, driving engagement and interaction. According to Kevin Mullaney, “this was a highly innovative use of technology targeted at generating return on investment, using the mobile platform to engage customers and given them an incentive to enter the store and transact.”

As visitors accessed the mobile experience, they were invited to discover their “Yeti” name, pick a snowflake and flick it from their device into the window itself, where it materialized in the sky and drifted to the ground. The Science Project joined forces with MakerBot to offer 3D printed snowflake ornaments as gifts for all those who made purchases in the store using their MasterCard. See the full video of the interactive experience here: https://www.youtube.com/watch?v=t8vnsHU4kDE

About The Science Project

The Science Project is highly focused on creating the “Theater of Retail,” developing e-commerce and m-commerce sites, retail installations, social campaigns, proprietary apps and custom publications to make every digital experience an enlightening and fulfilling one.

About the Conference

The Daily Digital Signage and Digital Out of Home Industry Investor Conference connected investors with the latest trends and observations on the future direction of the digital signage and digital out of home industry.

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Watch the video.

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