New Sports & Rec ceo learns the game - Stephen Bebis

Discount Store News, March 4, 1996 by Richard Halverson

TAMPA, FLA.--Stephen Bebis, the new ceo and chairman of Sports & Recreation, has hit the ground running--to as many of its 80 superstores as he can.

Coming into his new job without experience in sporting goods retailing, Bebis said it will take him at least two months to learn the industry. Bebis, 43, comes to the post after a long background in the home center industry. He founded the Aikenhead home center chain in Canada for the Molson Cos. and continued as a Home Depot executive when that chain bought Aikenhead in '94.

Last month, Bebis abruptly replaced Jim Bradke, founder of the chain, after the Sports & Recreation board ousted Bradke without explanation. Bradke initially said he intended to contest his ouster, but changed his mind after a day. What induced Bradke, who remains as a director, to endorse his successor remains undetermined.

After founding the chain, Bradke sold the business in '89 to Invest Corp., a holding company based in the Middle East that funnels Arab oil money into U.S. investments. Invest, which also owns Saks Fifth Avenue, took Sports & Recreation public in '92 but retains a controlling stake.

Sports & Recreation's stock price--as high as $29 in 1993--plunged over the past year as aggressive expansion (24 stores last year) ate into profits. It closed at $4.75 the day before Bebis was appointed, but gained $1 in the week following.

Though short on specifics, Bebis sees his main role as re-engineering the company to restore its profitability. His main goals:

* Reduce debt, perhaps by selling and leasing back 47 stores it owns outright;

* Curb expansion, perhaps opening only three of the nine stores Bradke was planning (which is down considerably from last year's 24 and 1994's 17 new superstores.);

* Control bloated inventory and improve turns, now only two;

* Upgrade computer systems--a strategy he described as "pretty fundamental."

Also last month, Moody's Investors Service downgraded $275 million of Sports & Recreation debt.