Written by Joe O’Donnell
Photo by Beau Gustafson
As one of the fastest growing public companies in the Birmingham market, Hibbett Sports has fine-tuned a growth strategy that saw the company pass the 1,000-store mark a few months back with an opening in Sealey, Texas. The company opened a new distribution center in Alabaster about a year ago and moved into their new headquarters out on Lakeshore about two years ago.
“It is a little bigger than we thought we might need, but we are filling it up quickly,” says Hibbett CEO Jeff Rosenthal, who is manning the helm of a retailer attuned to smart growth. The strategy of locating in small markets and towns where competition is minimal, yet consumer interest is high, has yielded impressive growth for the sporting goods retailer.
“Our industry is a lot about fashion, but also it is a lot about fun, youthfulness, activity, and entertainment. It is a pretty good space to be in. There is always growth. It keeps you young,” says Rosenthal, a 30-year veteran retailer who has worked at Hibbett since 1998. Prior to that, he worked with Champs, another sporting good retailer. “After college, I swore I would never work in retail because my father was a furniture retailer in St. Petersburg, Florida. But I love this business,” he says.
With brand names like Nike, Under Armour, Adidas, The North Face, Jordan, and Costa, Hibbett Sports brings fashion and footwear together for customers and their game. “We want to be known for convenience, brands, and service,” Rosenthal says. “We are your neighborhood sports store: Full price, full service in locations where we are needed,” he says.
“The brands have continued to drive a lot more of the business,” he continues. “A lot is done around athletes—the Jordan brand within Nike, for example. It continues to drive a lot of business. UnderArmour is also coming on strong. These brands create market space with a marketing driven philosophy as much as product driven one. People just like to be associated with athletes.”
In many ways, the business is quite unique, Rosenthal says. “Most products are not about price. They are sold at full price. The top brands keep a tight rein on distribution.”
Change has moved at a quickening pace throughout the retail industry and sporting goods has been no exception. “The bigger players are getting much larger in both the retail and manufacturing space. And the smaller equipment manufacturers are merging. There is definitely some consolidation,” Rosenthal explains. “You are not seeing as many mom and pops in the smaller markets where we operate. It is changing as fast as it ever has.”
Hibbett is working hard to keep up, and their strategies are working. “We are in some ways playing catch-up,” Rosenthal says. The retailer is developing what Rosenthal calls its “omni-channel shopping experience,” where, for example, a customer could purchase online but pick the merchandise up at the brick and mortar store. And overall the company’s digital retail space is growing. Hibbett’s strategy of locating in smaller, less competitive markets seems to even be paying dividends.
“More people are buying online, but we are a little more protected with our small market strategy,” he explains. “That strategy has been the key. Even though we are in sports and everyone says they like competition, no one really does. We want to go where we are needed. We want to be at least 20 to 25 minutes drive time from any major competition.”
This year Hibbett Sports will open 85 to 90 new stores. “As we grow our digital space, that area of the business will also continue to develop,” Rosenthal says. The company has a loyalty program, the MVP program, in which 5 million customers are enrolled. The MVP program is involved in more than 43 percent of the company’s total transactions. “We are putting in systems to help us drill down into that data to uncover customer shopping patterns,” Rosenthal says. “We are developing our social media platforms. We think things like Twitter, Instagram, and Facebook drive customers to stores.”
When they do, those stores will be in the geographical sweet spot defined by the Hibbetts team. “Finding the right real estate is key. We are in 32 states, and we have identified 100 potential sites in those states,” Rosenthal explains. “If we were to move into California, we could easily have 100 stores there. We have 100 stores in Texas. We are all the way out to Arizona, and we have had stores open in Pennsylvania and New Jersey. We have 90 stores here in Alabama.”
As Hibbett continues to plant the flag, their winning strategy of convenience, location, and service remains the same.