Leah recently showed me a report on the top 100 sporting goods retailers in the US and I wanted to write about some of my thoughts about the data. All the facts and figures I’ll be referencing in my post come from this report, put out by Sporting Goods Business, just so ya know.
First of all, it is no big surprise that Wal-Mart is at the top of the list of sporting goods retailers but it really is surprising how big Wal-Mart is in this space. With $17.1B in sales (sporting goods + toys) they blow away #2 Target ($2.6B in athletic goods only) and all the “Big Box” sports retailers like The Sports Authority and Dick’s. While many sporting goods retailers would like to believe they “own” their particular sport, no one can outsell the big chains. Take for example Performance, Inc, owners of the Performance, Nashbar, and Supergo retail operations. Performance comes in on the list at #47 and clearly they are the 800 lb. gorilla in the retail bike industry. But I would wager that with $200M in estimated sales in 2004 that Performance is way behind Wal-Mart who could easily sell over $1B in bikes and accessories without breaking a sweat. Wal-Mart = the 8,000 lb. baseball bat wielding gorilla in the sporting goods industry.
I also found it interesting that Bass Pro Shops weighs in at #5 overall in the retail sporting goods sector with just under $2B in sales. The most amazing thing about this is that Bass Pro does this with just 26 stores! Just think about all the Foot Lockers (1,448 stores, $1.7B revenue) and Dick’s (235 stores but just $0.15B more in sales) out there that manage to sell just a fraction of what a single Bass Pro Shop sells. I remember reading that the original Bass Pro is the #1 tourist attraction in the state of Missouri with millions of customers each year. Wow. Cabela’s is also doing well with just 10 stores and $1.55B in revenues (even beating Bass Pro on a revenue per store basis).
Coming in at #15, Nike was estimated to have $1B in retail sales in 2004. This is not surprising since Nike is easily the biggest name is sports; but wait! Isn’t this a list of sporting goods retailers? Yep, it is and yep, they are. Nike has over 100 Niketown and Nike “outlet” shops around the country where customers can buy the latest gear at suggested retail prices. But what if you’re a retailer who sells Nike shoes? Isn’t this a little unfair for your vendor to sell directly to the public? Of course plenty of other suppliers have chosen this path (most notably Apple Computer) but the magnitude of this arrangement becomes evident when you look at the size of the stores below Nike on this list: REI, Champs Sports (probably huge buyers of Nike products), The Athlete’s Foot ($400M in sales), and Footaction (also $400M in sales). Seems like a tough business when your #1 product (shoes) is being offered directly by your #1 supplier (Nike). Plus Nike will never run out of the hot products while you beg for the scraps. Reebok and Adidas are also in on the action, coming in at #45 and #53 respectively.
There were lots of mergers and acquisitions in 2004 as Foot Locker snatched up Footaction (#31), EastBay (#37), and part of Athlete’s Foot (#31). Now maybe they can stay ahead of their biggest competitor/supplier (Nike). Dick’s bought Galyan’s (which I always liked better than REI, hopefully Dick won’t screw it up) and the VF Corporation bought Vans. VF, if you don’t know, has been snatching up distressed brands and now owns North Face, Jansport, Eastpack, and Reef to name a few.
One glaring omission in this year’s report is Sports Endeavors, Inc., #69 in the 2003 report. I’m actually doing an internship at Sports Endeavors (producers of the Eurosport soccer catalog, the Great Atlantic Lacrosse catalog, Soccer.com, and Lacrosse.com) this summer and I’m pretty sure that their 2004 revenue would place them squarely in the top 70 again this year. The only reason I can figure they weren’t included is that they don’t have any brick-and-mortar stores (which makes their business all the more impressive in my opinion). Since the report doesn’t mention having physical stores as a criteria for inclusion, it leaves me questioning how accurate this report really is since they are missing such a large player (and who knows how many others were similarly overlooked?).
All in all this is a great (if not somewhat incomplete) report for understanding the retail sporting goods industry and for identifying opportunities for the future.