The Colorado Springs Galyan’s Trading Company outdoor and sporting goods store will be the company’s third in Colorado and part of an anticipated nine new stores expected to open this year throughout the nation.
A new 80,000 square-foot Galyan’s opened at Denver’s Park Meadows Mall on April 18 in a former six-screen movie theater and closed arcade. Its first Colorado location is a 97,000 square-foot anchor store at Broomfield’s FlatIron Crossing mall.
The Colorado Springs store is nearing completion for its spring opening at the First and Main center on Powers Boulevard and Constitution Avenue.
During an April 9 Bank of America Securities Consumer Conference, Galyan’s CEO-chairman Robert B. Mang said Galyan’s plans to have a total of 35 stores by the end of the year on an expansion plan fueled by last summer’s net $112 million IPO and continuing sales increases.
With its recent Chicago store opening, the chain has 27 stores in 14 states. In 1995, it had six stores. Fourteen Galyan’s opened in the past 24 months.
Mang said Galyan’s has logistics and distribution infrastructure in place to support 70 stores and has identified 150 potential locations. The current store format with possible smaller specialty stores in strategic geographic clusters could mean 300 eventual stores, he suggested.
Mang said Galyan’s seeks locations with at least 250,000 households with 20 percent of them in the $75,000 income range.
“That typically means an $18 million store for us,” he said.
In March, Galyan’s reported fourth quarter sales rose 13.4 percent to $174.8 million compared to last year and fiscal-year net sales were up 14.4 percent to $482.5 million as part of the expansion. Comparable-store sales (sales from existing stores) also were up 3.3 percent — burdened by cold-weather apparel markdowns during the quarter’s mild winter but boosted by higher-than-expected sales in athletic and casual shoes and apparel, team and family sports gear and golf and fitness equipment.
Fourth quarter earnings per share rose more than 54 percent to 74 cents, and Mang projected a strong 28-34 percent EPS growth rate this year — 25 percent long term. Galyan’s is traded on NASDAQ under the symbol, GLYN.
Mang said Gart Sporting Goods is a fine competitor, along with several other sporting goods stores, but Galyan’s also considers REI and Eddie Bauer competitors in some categories, such as equipment and apparel.
He said the store changes 40-70 percent of its product mix depending on local competitors and consumer interests. Eight corporate product managers define equipment and merchandise mix by local market and are held accountable for sales by unique market aspects, Mang said.
Typical stores carry about $21 million inventory in a mix of 38 percent equipment, 17 percent sporting goods, 28 percent outdoors and 14 percent footwear. Footwear alone is a $3 million business for most stores, Mang said.
Nike and Columbia Sportswear are its largest suppliers, but Mang said stores carry several high-end specialty brands, such as those supplying Mount Everest expeditions, and Galyan’s private label, which represents about 15 percent of offerings.
Galyan’s avoids “high-low” promotion pricing, favoring “every day competitive pricing,” Mang said
“What’s important for our stores is pricing credibility and customer service,” he said. “Our customers want service and they want our products in stock.”
He called the company a “new breed of category killer” focused not on product categories but on consumers with active lifestyles.
“We view ourselves as enablers,” he said. “We believe we enable people who have avocations to fulfill their passions and dreams.”
Featuring 16 specialty shops in 40 departments, the stores’ competitive advantage is their “wow” factor and authenticity, he said. With 90,000 items, about double of typical competitive stores, Mang said Galyan’s features activity areas to engage customers, who can try out equipment, such as golf clubs, table games and others. All new stores have a free climbing wall.
Mang said the company looks to hire people enthusiastic or passionate about a sport or activity (many stores have PGA players on staff), and requires they complete 45 hours of product training in the first 90 days of employment. Employees can receive commission overrides.