New sporting goods store may come to town

Gart Sports considering opening business near Central Park Plaza

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— Officials of Gart Sports confirmed this week they have been looking closely at building a new store in Steamboat Springs, but nothing is certain.

"I'm nowhere near having a lease signed," Gart Sports Vice President of Real Estate Development Lucey Kelton said. She said her company has been researching the practicality of a site in the Central Park Plaza shopping center near Wal-Mart.

"We're looking at square footage and how we can lay out the building," Kelton said. "We've met with city officials to see what they want there."

Central Park Plaza is owned by THF Real Estate of St. Louis, which owns shopping centers all over the country.

Gart Sports was founded in Denver in 1928, but it has grown dramatically and is poised to solidify its position as the second largest sporting goods chain west of the Mississippi, as a result of its pending merger with Oshmans. Gart Sports was previously known as Gart Brothers before its family ownership sold the company. The company merged with another sporting goods chain, Sportmart, in 1998.

Gart currently owns 120 stores in 16 states, but that number would increase to 178 stores in 25 states if the merger is completed as scheduled by early August. Together, the two chains generated revenues of about $1.1 billion during the four fiscal quarters that ended ended Oct. 28, 2000.

The giant sporting goods chain finished fiscal 2000 by posting sales growth of just more than 15 percent for the 14 weeks that ended Feb. 3. Sales were up to $231.6 million for the quarter, compared to $201 million for the same period the previous year.

The arrival of the second largest publicly traded full-line sporting goods retailer in the western United States will almost certainly change the landscape for local sporting goods retailers.

Jim C. Hansen of Old Town Realty in Steamboat, which represents THF, said representatives of all parties concerned have had a tentative meeting with the Steamboat Springs planning department. Hansen said Gart would like to lease the land at the south end of the shopping center and build a two-story building that would include 40,000 to 45,000 square feet of commercial space on the first floor and 42,000 square feet of apartments on the second floor.

Gart would not occupy all of the commercial space and several existing tenants of Central Park Plaza have expressed an interest in moving to the new building.

In an ideal world, Hansen said construction on the building would begin next year with occupancy in winter 2002. He is willing to meet with prospective tenants of the new building.

Gart bridges both the traditional sporting goods and clothing lines with extensive lines of ski equipment and clothing in its Rocky Mountain region stores. It also carries deep lines of outdoor sports and camping equipment.

Steamboat Springs sporting goods executive Keith Liefer said he's philosophically committed to free competition, but he wouldn't greet the arrival of Gart Sports here with a great deal of enthusiasm.

Liefer is the chief operating officer of Christy Sports, a 35-store chain primarily in Colorado, with five retail stores in Steamboat. Liefer has been based in Steamboat for many years, and his Denver stores have always competed with Gart's.

"We don't take a negative approach to competition as a retailer, although I can't say I'd welcome them into the area," Liefer said. "They have a right to open a business wherever they believe they can be competitive. As a community, we need to look at what impacts this has for the long term. Will they drive a lot of smaller longtime businesses away?"

Christy Sports has advantages over other local sporting goods stores because of its size, Liefer said.

But Gart's vast size multiplies those advantages. Theoretically, he said, Gart might not have to be profitable in Steamboat its first year. It could come in with aggressive pricing to capture market share and "readjust the market," then two years down the road, pull the market back up to profitability.

"It's a vague theory, but it happens," Liefer said. "I'm not suggesting that's Gart's modus and I'm not anti-Gart's," but he wants to be reassured that Gart Sports is looking at Steamboat for the right reasons. Liefer said he hopes Gart is contemplating coming to Steamboat because he thinks it will fulfill a unmet need, and not just because public companies must constantly strive to show earnings growth.

Liefer agreed that in terms of traditional, ball-driven American sports, Steamboat is probably underserved. In fact, he said he himself would probably shop Gart for baseball equipment.

There are few existing outlets for equipment used in traditional American ball sports Wal-Mart being one. Local golf courses sell golf equipment and Christy Sports sells golf equipment in its store in Central Park Plaza, just a few steps from the site Gart Sports is looking at.

The local market for ski equipment and clothing is another matter, Liefer said. The number of entities selling and renting ski equipment has increased here as the number of skier days at the Steamboat Ski Area has remained relatively static at just more than 1 million for more than a decade. The arrival of Gart Sports could definitely hurt local ski shops he said.

"I don't believe the market is big enough to support a big box like Gart's without impacting local sporting goods stores," he said.

Although existing sporting goods stores in Steamboat compete aggressively, there is also an unspoken agreement to respect the niche of other stores. There's almost a benign atmosphere prevailing that has kept the different stores from going after another's niche just to get at the other guy, he said. He's skeptical a large corporate chain would observe those local conventions.

Competition from major retail chains doesn't necessarily have to hurt neighboring stores, Liefer said. The Christy Sports store in Central Park Plaza was in existence when Wal-Mart arrived next door, and because of its sheer size was able to sell tennis balls for less than Christy Sports could purchase them. That certainly hurt the sale of tennis balls at Christy Sports, but the traffic generated by Wal-Mart has definitely helped the store, Liefer said.

Whatever happens, Liefer said his store has always carried goods that allow it to reach middle- to high-end consumers, while Gart Sports has concentrated on lower- to middle-level consumers.

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