MC Sports seeks Southern exposure

Discount Store News, Sept 15, 1997 by Mike Troy

GRAND RAPIDS, MICH. - Even though more than half of MC Sports' stores are located in major northern markets such as Chicago, Detroit and Cleveland, the chain is looking to southern towns such as Kinston, N.C., and Dothan, Ala., for its future growth.

"I'm taking the company south," said president and ceo Jim Minton. "I'm going home."

The 76-store retailer isn't relocating from its Michigan headquarters, but for the Florida-born and Georgia-bred

Minton, the allure of smaller southern markets is lower operating costs, less competition and greater profits. Most of the chain's 12 to 15 stores slated to open next year will be in the South. Planned openings include Columbus, Ga; Montgomery and Dothan, Ala.; Chattanooga, Tenn.; Hickory, Kinston and Wilmington, N.C.; and Savannah and Macon, Ga. Probing even further into the South, Minton said the chain also has looked at Pensacola, Lake City and Lakeland, Fla. Most of these stores will be about 35,000 sq. ft., but MC Sports has also begun opening more of its 50,000-sq.-ft. superstores.

"Our future strategy is second-, third- and fourth-tier markets," Minton said. "A tier-two market is Savannah, Ga., a tier-three market is Macon, Ga., and a tier-four market is Kinston, N.C. [which has about 25,000 residents]."

As for Chicago, Detroit and Cleveland, the company has no plans at present to penetrate any tier-one markets or expand in existing markets. "The real estate, labor and advertising costs are obnoxious," Minton said.

There's also a lot more competition. In the Chicago area, there are 16 Sportmart stores, 14 Sports Authority stores, 10 MC Sports', Kmart, Wal-Mart and Target units, countless sport-specific pro and specialty shops and a 120,000-sq.-ft. Galyan's Trading Company store is that expected to open in 1998.

"There's a sporting goods store every three blocks in Chicago," Minton said. He's almost right. On Ontario Street in downtown Chicago a Sportmart and Sports Authority are about five blocks apart from each other

Despite the competition in Midwestern and Great Lakes markets, Minton noted that MC Sports is very profitable. During June, July and August, same store sales increased 5.3%. He wouldn't disclose actual sales figures but felt compelled to release the comp store figure because other broad line sporting goods chains have recorded several quarters of negative or single digit same store sales. Without sales figures it is impossible to know how MC Sports is faring against its large-market competitors.

Minton relishes the idea of operating in underserved smaller markets where consumers haven't been exposed to the array of products available at an MC Sports store. He believes that consumers in such areas are appreciative of retailers that operate stores with quality merchandise and that these consumers will travel great distances to shop at them.

"We'll pull from 50 miles around Macon," Minton said.

MC Sports won't exactly be alone in places such as Kinston and Dothan. The small market strategy has appealed to other retailers, such as Family Dollar and Dollar General, which have both enjoyed enormous success by opening stores in overlooked markets. Hibbett Sports, one of sporting goods up-and-coming chins, likes small towns, too. It also operates primarily in the Southeast and attempts to open its stores in counties where the population rangers between 30,000 and 150,000. It's 5,000-sq.-ft. stores are smaller than MC Sports and rely on footwear and apparel for a greater percentage of sales.

Nevertheless, Hibbett president Michael Newsome views small markets the same way Minton does.

"We can make an impact in those communities because the store is something special," Newsome said this year at the National Sporting Goods Association trade show. "We can take vendors to markets where they are not as represented as they would like to be."