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Friday, Mar 29, 2024

Failure to Specialize Behind Sport Chalet Closure

With consumers growing increasingly health conscious, sporting goods are in high demand. But it seems some retailers still aren’t making the cut. La Canada-Flintridge’s Sport Chalet Inc. announced April 16 it will close all its existing stores in the coming weeks and has since ceased its online operations. Sport Chalet is not alone. In the past few months Englewood, Colo.-based Sports Authority Inc. and Pacific Sunwear of California Inc., a surf-and-skate apparel manufacturer in Anaheim, have filed for Chapter 11 bankruptcy protection. Though PacSun has yet to announce the closure of any stores, Sports Authority plans to close 140 stores nationwide. So why the closing and restructuring of stores in an industry that is supposedly thriving? It’s all about fulfilling a need in the market. The sporting goods industry has become extremely competitive and hyper-specialized. If a retailer has not carved out a specific niche for its brand to remain competitive, it has suffered. Sport Chalet tried to offer top-end expertise and advice about every sport, a model that didn’t work. “Retailers are becoming more specialized and picking categories they want to be known for,” Neil Stern, retail expert and senior partner at McMillian Doolittle in New York said. “Sporting goods retailers are facing two competitive issues. From a brick-and-mortar standpoint there is a lot of growth. People like Dick’s Sporting Goods are expanding and specialty chains REI and Cabela’s have grown to see a lot more physical spaces. Combined with the growth of e-commerce, the market is very competitive.” Sport Chalet had struggled long before it went private in 2014 with a buyout by Meriden, Conn.-based Vestis Retail Group in 2014. Vestis acquired Sport Chalet for $70 million in hopes of increasing its market share on a national scale, but was unable to improve the retailer’s financial performance. Sport Chalet began running store closure sales on April 18 at its 47 locations, and will proceed through April 29 at which point all gift cards, certificates and store credit will no longer be redeemable. Online sales have stopped, and the company’s website is no longer operational. In addition, Vestis has filed Chapter 11 bankruptcy. Vestis also owns retailers Eastern Mountain Sports, an outdoor equipment store with more than 65 outlets; and Bob’s Stores, an active wear retailer with roughly 35 locations. Both are based in Meriden, Conn. “EMS and Bob’s are now delivering solid performance but have been burdened by limited financial flexibility due, in part, to the unique competitive pressures facing Sport Chalet,” Mark Walsh, chief executive of Vestis said in a statement. “After reviewing a variety of strategic alternatives, we determined that the best path forward is to separate the businesses.” Founded in the late 1950s, Sport Chalet was a ski and tennis shop before expanding into a multi-unit chain focused on high-end gear. The retailer has 40 locations in California, and seven stores in Arizona and Nevada. Valley outlets can be found in La Canada, Burbank, West Hills, Porter Ranch and Thousand Oaks. During the Chapter 11 bankruptcy, Vestis will focus on strengthening its Eastern Mountain Sports and Bob’s Stores operations. A combination of nine EMS and Bob’s stores will close due to unfavorable real estate costs, according to Vestis. “We are confident EMS and Bob’s will be well-positioned to thrive at the conclusion of the process,” Vestis’ Walsh said in a statement. Luxury Grocer The affluent Westlake Village community will receive a new addition to its grocery mix this fall. Vintage Grocers, a Malibu-based upscale grocer, will open a store at Caruso Affiliated’ s Promenade at Westlake shopping center. The store will take over Bristol Farms’ former space. Bristol had been at the Promenade for roughly 20 years before exiting in March. “Vintage Grocers will be an exceptional addition to the retail and dining mix that we have at The Promenade at Westlake,” Kloe Colacarro, head of leasing at Caruso, said in an email to the Business Journal. “Their focus on customer service and quality falls perfectly in line with the tenants who are currently in the center.” Vintage Grocer is known for its gourmet, organic and natural foods, and is on the same pricing scale as Bristol Farms. This is the second of the grocer’s locations; the first opened in Malibu at the Trancas Country Market. The new Valley location will be twice the size of its first, and will also feature a private wine tasting room and expanded bakery, seafood and meat selections. “We’re excited to build on the success of Vintage Grocers and engage another neighborhood,” Paige Laurie, Vintage Grocers owner said in a statement. “Caruso Affiliated has had a transformative effect on Ventura County and we’re thrilled to be part of their premier dining and retail destination.” Staff Reporter Champaign Williams can be reached at (818) 316-3121 or [email protected].

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