Thinking Outside the Big Box

You’ve got to hand it to Sport Chalet Inc. for trying. The La Canada Flintridge retailer sells premium sporting goods…for premium prices. Have you visited one of its stores lately? While each department may not carry as much as a specialty store – say a golf or bike shop – the stuff they do carry is top notch. A pair of light weight hiking boots might cost you $150, but they’ll easily weather that hike up Mount Baldy and be ready for the next trek. Sport Chalet did well during last decade’s boom, but when housing prices fell, layoffs started and everyone felt cash poor, the company’s earnings and stock sunk. It’s been losing money for years, though it turned two small quarterly profits last year. Today, the economy is coming back, but the retail landscape has shifted under Sport Chalet’s feet. I haven’t taken a scientific survey, but I would bet most anything carried by retailer can be had online – and cheaper. Sure, there’s nothing like trying out a quality mitt, pounding your fist into it and taking a whiff of that freshly-tanned leather. But a price tag well above $100 could send you home to see if you can get it cheaper online. It’s the same well-known zombie shopper that has famously hurt the big electronics stores such as Best Buy. Of course, Sport Chalet and other brick-and-mortar stores have long followed a strategy to combat online retailers –lure shoppers into stores anyway they can. Flyers, coupons, you name it. The idea is that an in-store experience will prompt a sale on the spot. Maybe your kid needs a glove now for practice tonight. Maybe you just can’t wait to take that sweet smelling glove home right now. Amazon may be fast, but not that fast. But, wait a minute. It just might be. The world’s largest online retailer has made news rolling out programs that allow shoppers to order online and receive their products within hours for a cost of $8.99 per shipment plus 99 cents per item. It’s not available everywhere or for all items, but this is Amazon. Just wait. And it’s not the only online retailer with such a program. EBay has started one too. So what’s a brick-and-mortar to do? The answer for Sport Chalet Chief Executive Craig Levra was obvious: the same. The company is starting its own program at all of its 53 stores that allows customers to call a local Sport Chalet within 30 miles and get delivery the same day as long as they place the order by 1 p.m. There are seven stores in the greater San Fernando Valley so local customers are covered, but like many goods and services at Sport Chalet it doesn’t come cheap. It will cost $25 in major metro areas and $35 elsewhere. Levra told Business Journal reporter Elliot Golan in an article on page five of this issue that “time is a currency” and as an “elite” retailer Sport Chalet can afford to do this. At those prices, I’d say, any retailer could afford it. And there are real limitations for a smaller chain like Sport Chalet trying to offer same-day delivery. If a particular item is out of stock at the local store, same-day delivery won’t be an option. Like I said. You’ve got to hand it to Sport Chalet for at least trying, but it’s hard to imagine this is anything more than the retail equivalent of Hans putting his finger in the dike – without the happy ending. Same-day delivery by online retailers is a threat to brick-and-mortar shops precisely because it combines huge inventories of competitively priced goods with the near instant gratification offered by shops. Offering limited inventory with high delivery costs is at best a niche service only a small minority of shoppers will choose. But, I’ve got to hand it to Sport Chalet, what else can it do? • • • Our Commentary section this week features a cartoon by Steve Greenberg, who gives us his take on the decision by NBCUniversal to replace Jay Leno with New York-based comic Jimmy Fallon. On the Op-Ed page, the Valley Industry and Commerce Association takes a somewhat surprising supportive stance on a proposed fee to help finance affordable housing projects. And the Santa Clarita Valley Economic Development Corporation joins other voices calling for reform of the California Environmental Quality Act. Laurence Darmiento is editor of the Business Journal. He can be reached at [email protected].