THE SPORTS GUY
The Sports Guy is an independent sporting goods store located in a small town outside the Greater Toronto Area. About half the town's population lives in the older section of town; the other half consists mostly of younger families living in recently built subdivisions to the south of town. Nearly all of the residents of these subdivisions commute daily to their work in the Greater Toronto Area. The housing developer has placed before the Ontario Municipal Board proposals for considerably more housing development over the next ten years.
The Sports Guy is owned by Bob ("Rocky") Rhodes, age 32, who has for many years been a high-profile personality in the local sports ...view middle of the document...
After 2004, the town grew and the area around Rocky's store became built up into a quite prosperous neighbourhood. Strip malls developed, and The Sports Guy is now located in a busy commercial area. The store's property taxes are $12,000 per year.
The land package that Rocky bought consisted of two lots on a corner. The store was built on one lot; the other remained vacant. Rocky had originally thought of building a parking lot on the other lot but never did so. At first, this was because he already had considerable debt and was reluctant to borrow more in order to build a parking lot. Later, as time passed, he found he didn't need to use the lot for parking -- he had a few parking spaces beside his store and the development of a strip mall beside him provided more spaces. A hockey teammate who is a local realtor thinks the vacant lot could now be worth as much as $120,000.
About 70% of The Sports Guy's sales consist of equipment and uniforms bought by local teams. The largest customers are hockey and baseball teams associated with town and county leagues, but school volleyball, soccer, football and other teams account for a good proportion of sales as well. It was sales to local teams that formed the original basis for starting The Sports Guy, with Rocky's personal association with so many local sports people providing the key to these sales. While sales to teams still represent 70% of The Sports Guy's sales, they have not been growing much in recent years. In particular, kids' leagues, which were once a major aspect of the town's sporting scene, have not grown much over the past decade. In fact, league player registrations have been slowly declining, partly due to declining family size and partly due to competition from other activities for children.
About 30% of The Sports Guy's sales consist of regular ("walk-in") retail trade that consists of a wide range of sports and recreational merchandise. Its main retail competitor in town is the Canadian Tire store. This is an older store that is relatively small by modern Canadian Tire standards. It offers low prices, but stresses high-turnover items and lacks higher-quality and specialty items. People have commented to Rocky that Canadian Tire's prices are good, but that it is lacking in customer service.
As noted earlier, most of The Sports Guy's selling has been through Rocky's personal contacts with teams. In addition, the store regularly runs a small ad (1/16 page) in the local newspaper, which is printed twice weekly and distributed free to each household in town. The paper stresses local news, and Rocky has heard that a survey conducted by a group of retailers indicated that its readership consists mostly of longer-term residents. In addition, The Sports Guy advertises on the sports show on the local cable TV channel that covers community events, and in the local arena.
For several years, Rocky has provided part-time employment in his store for several members of the town's...