Sneaker Stadium: head over heels in brands

Discount Store News, May 5, 1997 by Mike Troy

What Sneaker Stadium is to footwear, Cost Plus World Market is to the burgeoning market for creature comforts. The discount wine, gourmet foods and home accessories retailers this year will continue expansion of its value-oriented concept into Midwestern markets. Of the 10 units slated to open, four will be located in Michigan. The concept was extended beyond its foothold in the western market for the first time last year when stores were opened in Illinois and Wisconsin.

Also expanding--and rapidly--is Vitamin World, a value-oriented retailer of vitamins and nutritional supplements. This year it will add 80 new stores to its existing base of 77 units. Most are located in outlet malls, and two are in the U.K.

The upper income shoppers who helped fuel mass's phenomal growth are pulling away, according to WSL Strategic Retail's annual "How America Shops" survey. Households with' incomes over $70,000 are shopping mass less frequenly (down 12%). The beneficiaries: specialty clothing stores (up 13%) and specialty merchandise stores (up 22%). Households with incomes between $45,000 to $69,000 have increased shopping frequency at mass only 11% vs. 23% for $12,000-$24,000 households and 19% for $25,000 to $45,000 households.

If a customer can't find what he needs in the way of athletic footwear at a Sneaker Stadium store, it must mean that the sport hasn't been invented yet. That's because the rapidly expanding 32-store chain boasts more than 40,000 pairs of shoes in 3,000 styles sourced from approximately 100 vendors. Aside from its enormous selection--a necessity for a chain calling itself Sneakers Stadium--the retailer combines everyday low prices on leading brands with a unique shoe-buying experience.

"Basically, our strategy is to get the kids in here," David Bloom, president, founder and chief executive officer told DSN. "The kids are the decisionmakers. Once they're here, nobody can out assort us, and nowhere can they have more fun shopping for athletic footwear."

Sneaker Stadium is also an example of a retailing concept that is plugging into the quality-consciousness and brand-awareness that are increasingly driving consumer purchase decisions. "Value is not price," according to Len Berry, chairman of the Center of Retailing Studies at Texas A&M University. As Berry noted at last month's IMRA Advertising, Sales Promotion assortments, fair prices, respectful treatment, time and energy savings, and a being a fun place to shop."

What's so fun about Sneaker Stadium? For starters, there's an indoor track to try out running shoes or in-line skates. Also, budding basketball players can compare their vertical jump to NBA all-stars on a machine called Hang Time. Ever been to neighborhood kids play pick-up games, even if they aren't buying shoes? They can also test their agility on a machine call Prime Time, which simulates out of rows of tires. In addition, the company is experimenting with putting a soccer goal in stores. Adding to the fun atmosphere are a half dozen large video monitors that display music videos or athletic events. It's all built around a 3,000-sku selection of shoes, most of which are displayed along "the great wall of shoes."

Sneakers Stadium's goal is to be the destination for athletic footwear, and all signs indicated that the chain's formula of broad selection, leading brands value pricing and a fun atmosphere is proving popular with customers. Bloom told DSN that projected FY 1997 sales will be $150 million, and this will be Sneaker Stadium's first profitable year.

"We have become profitable in a relatively short period of time," said Bloom, a 47 year old retail veteran who previously served as president and ceo of Herman's World of Sporting Goods and chief operating officer of Barnes and Noble. In 1993, Bloom and James Dideo, former executive vice president of store operations, real estate and construction at Herman's, founded Sneaker Stadium.

The following year the company opened its first two stores. Six more units were added in 1995 and another 15 were opened last year. So far, nine stores have been opened this year, and another 15 are planned. That will leave Sneaker Stadium with a projected 47 stores at yearend. For 1998 and beyond, at least 20 openings are planned. Total capital expenditures for the next two years are projected to be $80 million, according to Bloom. For the time being, Sneaker Stadium stores are confined to the Northeastern markets of New Jersey, New York, Pennsylvania, Virginia, Connecticut, Delaware, North Carolina and Maryland.

Helping fund the company's growth is the Boston-based private equity investment company Thomas H. Lee Co. which recently acquired 49 % of the company's privately held common stocks.

"Our capital needs are in place for the next two years," Bloom said. "Because Less is an aggressive company, we will have the freedom to enter new markets, try new strategies and be even more innovative in the future."

Bloom also contends the company has a solid foundation that will enable it to grow profitably.