Jack Smith: specialty discounter of the year - SPARC Awards

Discount Store News, Sept 16, 1996

FORT LAUDERDALE, FLA. -- Leave it to Jack Smith to do something for the second time around and still manage to establish a first with it. When The Sports Authority chairman and ceo was awarded the Specialty Discounter of the Year award last month, he became the first person in that category to have received it twice.

Much has changed since he picked up the first award at the 1992 SPARC ceremony. At the time, The Sports Authority operated 56 stores with annual sales of $411 million. By the end of this year, the company will have nearly 170 units--including six Canadian stores and a recent joint venture partnership in Japan--with sales projected to reach about $1.5 billion. At the 1992 ceremony, Smith noted that the company was about to open its first store in Chicago. Today it has 13 stores in the market, including two that opened the week he was honored with the 1996 award.

There is one other very significant difference.

"When I received this award five years ago, we were a part of Kmart's Specialty Retail Group," Smith told the audience at the SPARC Hard Lines awards ceremony. "So naturally, I stood up here and thanked their 2,000 store managers for their votes. This year, I know we did it without that built-in support, and that makes it even more meaningful."

When Smith founded the chain in 1987, he took as his role models Bernie Marcus of The Home Depot and Charles Lazarus of Toys "R" Us. The Sports Authority's performance in its first nine years has, in fact, managed to outpace the performance of either of the other two specialty concepts' performances during their first nine years.

In 1995, the company's net profits rose 31.9% to $22.3 million from $16.9 million as sales rose 19.9% to $1.05 billion from $838.6 million, making The Sports Authority the first sporting goods chain to break into the Billion Dollar Sales Club.

And now, after nine years of success with megastores, The Sports Authority is thinking small with a new prototype it calls Sports Authority Ltd. Launching in Manhattan with three units, the stores will offer a limited stock of sporting goods equipment, focusing on categories that do well in an urban setting, especially sports apparel and athletic footwear.

The company last month also opened its first Japanese store in Nagoya in partnership with Jusco, that country's third-largest retailer, and will open two more in Osaka in the fall. In '97, The Sports Authority plans to open three more stores in Japan. It is also considering joint ventures to open stores in Europe, most likely Germany and Great Britain.

At 50,000 sq. ft., the Japanese prototype is larger than the typical U.S. store. Store volume is expected to run 70% to 100% above the U.S. average of $9.2 million per store, and the profits will be double.

Like many retailers today, Smith bristles at the "discounter" label, preferring to focus on a "competitive pricing" image. Having established itself as the powerhouse player in its field relatively swiftly, the company is proud to call itself "the world's largest full-line sporting goods retailer."

But at bottom, Smith said, it all comes down to keeping your eye on the ball.

"As a specialty retailer, we know that we fill a particular need for our customers," he said. "And if we are going to stay strong, we have to ensure that we keep in touch with what their needs are."