Sporting goods giants score extra points - sporting goods retailers

Discount Store News, Sept 26, 1988 by Richard C. Halverson

Sporting Goods Giants Score Extra Points

After spending 18 years in the nest, the fledgling sporting goods megastore concept is ready to take wing and should be flying high by next spring.

That's when K mart opens its first--and long delayed--Sports Giant warehouse membership club of 50,000 square feet.

At Least nine sporting goods specialty stores, either warehouse-style or conventiona--in the 30,000-square-foot to 50,000-square-foot range--are set to open this fall. At least 16 more will follow in 1989, starting with four next spring. As of presstime, some 28 stores that fit the megastore criteria of size and selection were operating.

Sports Authority, Fort Lauderdsale, Fla., appears to be leading the expansion flight. In October, it will open two stores in Tampa, Fla., on top of its first units in Fort Lauderdale and North Miami. Next spring, it intends to open stores in Clearwater and West Palm Beach, Fla., said president Jack Smith, followed by six others in Florida through next fall. All stores will occupy 40,000 square feet.

By September 29, Oshman's is expecting to open two more of its SuperSports USA stores of about 30,000 square feet, one in Carle Place, N.Y., and one in Union, N.J. In '89, it will open four more SuperSports units, based on its Princeton, N.J., prototype.

Also in October, Sports Town, Atlanta, will open three more sporting goods warehouses, all in the Atlanta market, said president and founder Tom Haas. The chain now operates two of the 50,000 square-foot warehouse clubs, both of which are located in Atlanta.

Sportmart, which has been operating 40,000-square-foot stores since 1970 from its Niles, Ill., base, will open two more in Southern California, pushing its count to 21.

One of the Sportmart sites will be across the street from the San Bernardino warehouse club of All American SportsClub, said Robert C. Cole, vice president, general counsel of Sportsmart.

Head-to-Head Competition

Apparently, this will be the first head-to-head encounter of sporting goods megastores. Operators heretofore have picked their markets to avoid direct competition, but All American SportsClub is presently in a vulnerable position.

The chain fell victim to over-expansion and filed Chapter 11 last spring. Since then, SportsClub has closed two of its eight California clubs and scrapped plans to open four others in Phoenix, Ariz.

Founder Robert J. McNulty said he has changed his mind about trying to sell the chain and expects to emerge from Chapter 11 next February. The deadline for filing a bankruptcy reorganization plan is Oct. 15, he said.

"It's prematuer to talk about resuming expansion," he said.

Instead, SportsClub is upgrading existing stores by revamping the athletic shoe departments to a full-service concept, McNulty said. The first reformatted store, Torrance, Calif., will be completed around Oct. 1, he said.

Stepping up its expansion scale from three new stores in 1988, Sportmart expects to open next year "several more" megastores in each of its markets, Chicago and Los Angeles, Cole said.

And, adding emphasis to the sporting goods megastore trend, MC Sporting Goods, Grand Rapids, Mich., now part of the Thrifty Corp. family of sporting goods chains, expects to open in 1989 four more of its large stores in its Michigan, Ohio and Illinois market areas, executive vice president Raleigh Finklestein said. MC Sporting Goods already runs 30,000-square-foot stores in Lansing, Mich., and in the Detroit suburb of Troy, Mich.--K mart's hometown.

K mart originally announced it would open the first of four planned sporting goods membership warehouse clubs late this summer. But problems locating sites delayed the first openings until next March or April, a spokeswoman said. K mart is still looking for two more test unit sites.

K mart's first Sports Giant clubs, offering some 35,000 sku's, will be located in shopping centers in Madison Heights and Livonia, Mich., both in the Detroit market.

Denver-based Gart Bros., also part of Thrifty Corp., is planning to open 75,000-square-foot Sports Castle units in St. Louis and Kansas City, Mo. It now operates a Gart Bros. Sports Castle Store in Denver, opened 18 years ago, and one in Salt Lake City.

The two planned stores will be called Casey's Sports Castle, incorporating the name of the chain Gart acquired before Thrifty bought it. The company has not decided exactly when the new store will open, vice president Ken Gart said.

Herman's, the national chain recently acquired by Dee Corp., and which dominates the sporting goods industry with 1987 sales of $762 million from 242 stores, is one chain that is bucking the megastore bandwagon.

Herman's, Carteret, N.J., follows a "very successful, dominant strategy" of operating stores averaging 10,000 square feet, said George Walker, vice president, sales promotion. For the foreseeable future, Herman's will stick to its own formula, Walker said, and entertains no plans to open magastores.

Those chains that are opening megastores are avoiding areas of Herman's strength, Walker said, with the exception of Oshman's, which with its SuperSports megastore, invaded Herman's home territory of northern New Jersey.