Sports Authority spiffs up for mom

Turnaround: That's what Sports Authority executives are endeavoring to fashion at the No. 1 sporting goods chain.

September 07, 2001|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

It was the "buy one pair, get the second pair half off" sale on athletic shoes that lured Linda Kogod to The Sports Authority in Rockville last week.

But it was the store's new image that will likely keep her coming back.

Kogod, who brought her two sons into the newly remodeled store for basketball shoes and a putter, gasped in amazement at what she saw.

The tall, cluttered shelves that gave the place that overwhelming "warehouse" look had all but disappeared. The store appeared brighter and better organized with individual golf, tennis and fitness "shops" and a newly designed full-service shoe department.

"We stopped coming here," Kogod said. "It was impossible to find anything. Now it's so easy."

Executives of the nation's largest sporting goods chain are hoping for just that reaction from consumers - and women in particular - as the company launches a new store design aimed at overtaking the competition and boosting sagging sales.

The 10-year-old Sports Authority on Rockville Pike is the first Maryland store to be remodeled, just the fourth in the chain of 198 stores. Eight stores altogether will be remodeled this year, with 30 more slated for next year, some of those likely in the Baltimore area. Eventually all older stores - about 138 altogether - will get the new look, chain officials said.

"We were out of step," Martin E. Hanaka, chief executive officer of the Fort Lauderdale, Fla.-based chain, said last week. "We covered too broad an area and were doing it with an old format that was no longer consistent with the market.

"It reflected the marketplace of 10 or 12 years [ago], with warehouse racking, and was dark, like a Sam's or Costco. It didn't reflect the brand preferences, or adapt to the trends of women's participation in sports."

Store remodelings are the latest step in a revitalization that Hanaka launched three years ago. He was hired to revive a chain struggling with plunging stock and earnings and over-ambitious building and acquisitions. Since then, he has repositioned the balance sheet, closed underperforming stores and created a new prototype, which was tested with a new store in Clifton, N.J., in 1999. Pleased with the results, the company has since built seven stores based on the new prototype.

Now, even amid an economic slowdown that has dampened retail sales, Sports Authority is turning its attention to remodeling older stores, using the most successful elements of the new prototype.

The company is investing about $500,000 per store, even at a time when its financial results have been hurt by sluggish consumer spending.

In the second quarter, Sports Authority reported in late August, net income fell to $7.6 million, or 23 cents per share, down from $8.2 million, or 25 cents per share, while sales at stores open at least a year fell by 4 percent.

The slowdown hasn't thrown the remodeling plan off track, Hanaka said.

"A recession's a great opportunity for a company to grow its business" and try to grab market share from competitors, Hanaka said. "We have confidence in our cash flow. It's time for us to make our `box' stronger than the competition."

The company expects a return on its investment in about three years.

"We know it's a good use of our cash," Hanaka said. "We can compete more favorably by making the changes."

Analysts agree with the move.

"The warehouse look had grown tired and stale," said Rick Nelson, a retail analyst with Stephens Inc. in Chicago.

Remodeled stores "have much more of a specialty store feel, rather than the old warehouse look. The new stores should generate good sales productivity," Nelson said.

In the Rockville store, the dark blue ceiling was painted white, to give the store a brighter, airier feel. New flooring, fixtures and lighting were installed.

The store has been completely reorganized to be less scattershot. "Shops" are organized around various sports, such as golf, tennis, fishing, boating, cycling and skating, with the apparel for those categories nearby.

For instance, customers walking in the front door will first encounter the "fitness" shop, with treadmills and stationary bicycles, then right nearby, they'll find the apparel to wear during workouts. That department was moved closer to the front of the store to attract women.

"We really want the mom, the soccer mom, to be comfortable in this store," Hanaka said. "We already attract the male customer. But the woman is influencing 75 percent of the purchases, and buying a lot more for herself."

One of the biggest changes is in the footwear department, which has moved front and center, with wood flooring to set it apart. It has become full-service, with shoe styles displayed out front but the rest of the stock out of shoppers' view.

"It's our most profitable category, our meat and potatoes," said Dawn Holland, district manager for Maryland's 11 stores, as she led a tour of the newly remodeled store.

The new format has allowed Sports Authority to add new brands, such as Sketchers and Vans. Brands such as those previously had shunned Sports Authority because of its warehouse format.

The store changes appealed to Mark Ennes, a landscaper from Brookville, in Montgomery County, who said he shops at Sports Authority once or twice a year.

"It seems roomier," he said. "Everything seems neater and more attractive."

The chain is also launching a program to certify staffers as experts in various sports, such as fitness, bicycling and camping.

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