Smaller Sports Authority store improves expansion options

DSN Retailing Today, Nov 25, 2002 by Mike Troy

OCALA, FLA. -- The Sports Authority's expansion plans drew to a close this month with the introduction of a small format prototype that could create new growth opportunities for the company.

The nation's largest sporting goods retailer selected Ocala and Panama City, Fla., as locations to test a 25,000-square-foot store that is significantly smaller than the company's typical 40,000-square-foot stores.

"It is an appropriate size store for the size of the community," said Philippe Vanier, executive vp of store operations. "The biggest change you see in this store is the height of the fixtures. We were very cautious in not going too high in any area."

That mentality led to the creation of an apparel department on the inside of the racetrack, where even a person of moderate height can see throughout the store with the only impediment being a fitting room structure. In addition to a clear line of sight, customers' ability to navigate the store is further aided by the use of overhead department signs that are color coded to the tops of gondolas. For example, the fitness department is identified by a large overhead yellow sign and a wide yellow band running horizontally on top of the department's gondolas. Other departments received a similar treatment with different colors. Team sports is red, golf is green, apparel is purple and outdoor categories are blue. The combination of low fixtures heights, signing and use of color also makes it easier for store employees to direct customers to a department or see across the store to an area where a customer needs assistance.

Although the store format is new, the overall layout and merchandising is consistent with The Sports Authority's approach of the past few years. A full-service footwear department is in the right front corner, men's and women's apparel is displayed on rolling fixtures on a carpeted pad on the interior of the racetrack and hardline departments positioned around the outside of the store are laid out in such a way as to create a store-within-a-store specialty shop environment.

Where changes are evident is in the reduced size of most departments, a general tightness to the store and colorful graphics. The store's main racetrack is narrow at just six feet and shopping carts are small. Instead of separate checkout lanes found at company's larger stores, there is a central checkout bullpen that contains several checkout stations.

Shrinking the size of the store from 40,000 square feet to 25,000 square feet means all departments had to give up some space, but some gave up more than others. Hockey, for instance, was eliminated from the team sports area while golf was a dominant department with 18 sets of clubs on display adjacent to an indoor driving range where customers could hit balls into a net.

"We have focused on the outdoor businesses in this market and we expect it to do well," Vanier said.

Another focus is bowling. A popular activity in the Ocala area, the store devoted 24 feet to the category, including nine different balls, on-site hole drilling, eight shoes styles and an 8-foot section of bags and accessories.

The introduction of a smaller format store is a departure for a company that achieved its industry-leading position by opening virtually identical warehouse style stores throughout the '90s. However, the warehouse look grew dated and when a new management team led by chairman and ceo Marty Hanaka arrived nearly 5 years ago, the decision was made to put growth on hold, stabilize the company financially and then upgrade existing stores to a new look. This year, armed with a solid balance sheet and an effective store remodeling program, The Sports Authority resumed expansion with a strategy it called "focused growth," which involved the opening of six new stores. Next year, plans call for 12 new stores followed by 15 units in both 2004 and 2005.

The introduction of a smaller format store represents a new source of growth for The Sports Authority, allowing the company to enter smaller markets where consumer demand won't support a 40,000-square-foot or larger store and also to fill in existing markets. The smaller format also allows the company to go into markets with limited competition and be a big deal to area residents, as is the case with the Ocala store.

Approximately 150 customers waited in line prior to the store opening at 9 a.m. on a Saturday to get a free T-shirt and to take advantage of price discounts of up to half off on two dozen items. A supply of 200 T-shirts was quickly exhausted and the store handed out another 100. And despite manning every register for the first several hours the store was open, the number of customers in line held steady at 40.