Byline: Sharon Edelson, Mark Tosh, Bud Cohen

The Sports Authority Agenda
NEW YORK — The Sports Authority is a category killer with a killer instinct.
The 107-unit chain, currently operating in 22 states, plans to open 25 new stores annually, including many in urban areas, according to William Smith, chairman and chief executive officer.
“We’re targeting other urban areas,” Smith said. “We have three sites opening in Boston and three or four sites opening in Chicago in 1995,” Smith said. In addition, Smith said Sports Authority next year will open stores for the first time in Toronto, San Diego and Puerto Rico.
Category killers have traditionally gravitated toward the suburbs, where large, affordable retail space is easier to find, but Smith and other big box retailers have been riding into urban areas.
With 15 existing stores in the tri-state area, Smith is now aggressively eyeing opportunities in Manhattan. The company opened its first Manhattan store at the Hotel Pennsylvania on Seventh Avenue and 33rd Street last November. Smith has also expressed interest in opening a 47,000-square-foot store on the southeast side of 14th Street and Broadway.
“We’re becoming more and more known in Manhattan,” Smith said. “We’re known for sporting goods in the suburbs — New Jersey and Long Island and Connecticut. The first Manhattan store is something New York customers are getting used to.”
For urban dwellers accustomed to shopping in smaller venues such as Paragon and Herman’s, Sports Authority is something of a culture shock. The vast Manhattan store has over 40,000 square feet of selling space and carries 42,000 pieces of activewear and over 500 styles of footwear, as well as equipment for just about every sport known to man: golf to hunting, fishing, tennis, skiing and bicycling.
Smith cited some best-selling brands in the stores, including Fila, Le Coq Sportif, Head, Reebok, Nike, Danskin, Gilda Marx and Baryshnikov.
“We’ve always been into fashion,” Smith said. “There’s even fashion in our hard lines. Look at tennis racquets with their different colors. Now, you don’t just buy a dumbbell anymore, you buy them in blue and pink.”
Smith was chief operating officer of Herman’s in the late Eighties, when he witnessed the birth of big box retailing.
“When I looked at people like Toys “R” Us and Home Depot, I said to myself, ‘Why not sporting goods?”‘ Smith recalled. “People thought I was crazy at first. I wanted to know why I couldn’t do so much more with a 40,000-square-foot store than a 7,000-square-foot Herman’s store.”
Smith founded Sports Authority in 1987, then sold the company to Kmart in 1990. Last year, Kmart spun off Sports Authority through an initial public offering.
“When I sold the company to Kmart in 1990, it was with the understanding that we would have autonomous control,” Smith said. “Joe Antonini [ceo and president of Kmart], kept his word and moved the business forward.”
Smith declined to comment on the company’s volume for 1994, but said volume in 1993 was $607 million, $200 million more than the previous year’s.
Smith, who said he’s never been inhibited by competition, added, “We’re taking market share from a lot of different areas. We take market share from the discounters, Kmart, Wal-Mart — people like that.”
Sports Authority uses its abundant space to house product, not erect “try-out” areas or basketball courts, like those Nike Town features in its stores.
“Our stores are mainly for shoppers. They’re not a playground,” Smith said. “We’re not a museum, we’re a retail store. I think our stores are exciting. We give the customer what he/she wants today: good service and fair pricing.”

The Modell’s Method
NEW YORK — With competitors such as The Sports Authority, Herman’s and Foot Locker muscling in on its territory, Modell’s Sporting Goods is fighting back with expansion plans of its own.
Founded as Henry Modell & Co. Inc. in 1889, the company — still family-owned — is eager to open five or six units this year, primarily in the New York metropolitan area.
“It’s grow or die,” a spokesman for the Long Island City, N.Y.-based Modell’s said. “This is normal.”
Leases have been signed for new stores in Brooklyn, the Bronx and Westbury, and the retailer is looking at prospective sites in Manhattan and other nearby areas to keep its growth going.
Unlike superstores such as The Sports Authority, Modell’s stores are more specialized with narrower selections. New units will be in the 12,000- to 15,000-square-foot range and feature sports equipment, licensed apparel and footwear.
The Brooklyn store, in the Bay Parkway shopping center, is expected to open in March, and a new unit near Co-Op City in the Bronx also should open in the spring, according to the spokesman. The Westbury store, near the old Roosevelt Field, will not open until the fall.
Modell’s operates a total of 48 stores in three states. Thirty-two stores are in the metropolitan area; 16 are in and around Philadelphia.
The retailer generates annual sales of about $140 million, according to market estimates.

Nordstrom’s New Niche
SAN FRANCISCO — The look and feel of Nordstrom’s activewear departments may be in a state of flux, but one thing is sure: the women’s specialty chain is wedded to the concept and apparently sees nothing but good times ahead for the category.
“They’re really merchandising against the competition,” said Jennifer Black Grove, a securities analyst with Portland’s Black & Co., who follows Nordstrom closely.
“They’re pulling out all the stops,” Grove said. “They’re offering a wide variety of brands, using innovative fixturing, and bringing excitement to the department by constantly running videotapes and choosing brands and merchandise often pinpointed to the demands of a particular store’s customers. They’re creatively using their open-to-buy.”
Nordstrom reportedly does about $400 a square foot in its activewear areas. According to Grove, that is double the industry standard for department store activewear departments.
According to a spokeswoman, Nordstrom buys for all departments regionally, “but in some cases, we allow buyers to meet the particular needs of individual stores by changing the mix or adding particular lines or brands in those individual stores.”
Some of the lines offered in activewear are exclusive, such as Callaway golfwear. Other lines include Nike workout apparel, Rousso, ASR, Ours and Mossimo. There are also items from small manufacturers, such as San Francisco City Lights.
“Tennis posters over a tenniswear promotion, warmup clothes shown in a gym setting or a golf apparel photograph over our newest exclusive golf line, Callaway, are some of the ways we’re using visuals to increase excitement. We’ve done that in our new Washington Square store in Portland, Ore., and in Annapolis, Md., and we’ll be putting it into the new White Plains, N.Y., store too,” the spokeswoman said.
Sandy King, Nordstrom’s northern California regional merchandise manager for activewear, said the chain “continually evolves and modifies its fixturing and displays to best serve the needs of its customers and increase customer excitement. We’ll be putting the same layout into our White Plains store, but because it’s continually evolving, there may be some tweaks and changes.”
Activewear is becoming a lot bigger part of Nordstrom’s business, Grove said. In addition to increased attention in the stores, the category is being given greater exposure in the chain’s catalogs.
“The price points in the catalog appear a little lower, but they’re not cheap,” Grove said. “Nordstrom’s customer is not a deal shopper. She wants good value for her dollar and has learned to expect that at the store.”
Using the catalog has put the department ahead of its plan, she continued.
“People view Nordstrom as a high-price store, and the catalog is one way to demonstrate that it is not, that the store can meet the needs of people in all price categories,” Grove said. “It’s also a way to get the store’s message across to people who are not near one of the chain’s stores, and to build familiarity so when the chain opens a store nearby, it’s easier to build traffic.
“One of the ways Nordstrom controls prices in activewear is by reducing markdowns, trying to eliminate them by creative merchandising, display, promotion and tight inventory management,” Grove said.
She added that by bundling the activewear department with Brass Plum (junior fashions) and Ram (young men’s sportswear) departments, the chain creates more impact.
“It’s awesome the way it looks,” she said. “It shows lots of thinking and new ideas and gives the feeling that things are happening at the store. It is based on the idea that men now buy for women as well as vice versa, and gives an atmosphere of change, of currency, to everything the store does.”
Additionally, Grove observed, a large and exciting activewear department helps bring new, young customers into the store.
“In a way, young customers are the best kind of customer, because they have good disposable income, and if the habit of shopping at the store gets set, then the store can benefit for years to come,” she said. “Store loyalty is real, and that’s what they want.”
Nordstrom people, however, dismissed that idea.
“I don’t think that’s particularly accurate,” Nordstrom’s King said. “It’s an interesting idea, but we don’t necessarily think that’s the case. We don’t necessarily look at activewear as a way of developing loyalties. Our philosophy is to offer to all of our customers merchandise to fit their different, current lifestyles. The activewear department supports this philosophy.” — Fairchild News Service