How the Mighty
Have Fallen

Two former retail giants, Golfsmith and Sports Authority, succumbed to the fate of bankruptcy in the past six months.  Once leaders in their industry they are both footnotes in the history of companies who failed to remember a golden rule of business: ALWAYS keep the customer experience first and foremost in your business strategy.  The demise of these two retailers can be traced back to failing to differentiate themselves from the competition through superior products or a shopping experiences, consistently failing to commit adequate resources to engage their team members, and not developing a seamless omni-channel marketing experience.

NEVER LOSE FOCUS ON THE CUSTOMER EXPERIENCE

Golfsmith

Founded in 1967 as a custom club manufacture in Austin, Texas, Golfsmith grew to become the nation’s largest golf retailer.  Chasing an ever increasing larger retail footprint expansion continued across the US and Canada leading to more than 100 stores.  After doubling-down in 2014 to reduce costs and overhead, the company succumbed to Chapter 11 bankruptcy in September, 2016.

Leadership blamed their demise on a robust expansion strategy, economic recession, customer shift towards online shopping, declining popularity in golf, and Tiger Woods!  These factors obviously impacted the downfall of Golfsmith, but leadership never invested in a cohesive, polished customer engagement strategy.  Additionally, only companies who invest equal resources into their online presence will succeed even if they have a sizable brick-and-mortar presence.  Over the past 10 years, Golfsmith leadership time and time again failed to see how customers experienced the brand.

golfsmith building
Photo of outside of a Golfsmith

The lackluster instore experience combined with a poor online presence were two critical reasons the company never regained traction even as competitors such as PGA Superstore expanded and gained market share.  In a sport that requires a great deal of assistance by trained professionals in order to enjoyed properly Golfsmith dropped the ball.

A consortium led by Dick’s Sporting Goods purchased Golfsmith earlier this month and plan to liquidate around 70% of stores rolling the remaining 30 stores into their Golf Galaxy brand.  Combining the two golf retailers without changing core operating issues will only lead Golf Galaxy down a similar path.

Golf Galaxy’s parent brand, Dick’s flagship brand has actually grown in the past years by investing in their online presence, store design and layouts, and a cohesive omni-channel marketing strategy.

Sports Authority

Sports Authority is the second example of a company whose demise came at the expense of taking their eye of the prize.  Unfortunately, the failure of this Denver-based company was expected and began when Leonard Green and Partners took the company private in 2005, the first sign to a future closing.

Sports Authority
Photo of a Sports Authority

At the time of bankruptcy, Sports Authority employed 15,000 team members in 450 stores across 45 states. Developing a sustainable and enjoyable store and online experience took a back seat to wringing profit from lower overhead and expenses.  The customer experience at Sports Authority was abysmal and customer purchases were from necessity not desire.  Leadership cited pressure from other big box retailers, department stores, and small retailers for their failing sales.  However, they failed to address this decade old pressure and thought consumers were immune to an abysmal shopping experience.  Little differentiation existed between the different big box stores, the shopping experience become one of drudgery.

Few people can pinpoint the moment when the house of cards first began to sway, but the company’s foundation was built on quick sand and their demise was not an if but when.

The former Co-Owner of Gart Bros an early founder of Sports Authority, Ken Gart, recently spoke at the Outdoor Industry Association Rendezvous and had harsh words for companies that fail to keep the customer front and center.

“In the end, Sports Authority was meaningless to everyone,” he said. “It didn’t stand for anything.  No one took care of the business, and the investors sucked it dry.”  He continued to warn other big-box retailers they could face similar fate, “if you don’t stand for something, you are dead.”

The owners of Sports Authority and Golfsmith reduced expenditures on employee development/customer service and technology upgrades.  Leadership can attribute their downfall to the recession, large debt load, stiff competition, but the blame rests more on internal metrics in their control than the economy.  REI, Patagonia, and Lululemon are three examples we will look at later of companies who have developed and nurtured a strong brick-and-mortar and online presence simultaneously.  Keeping the customer front and center in all long and short-term decision making is vital to the continued success of companies in today’s hyper competitive marketplace.

Thank you for reading.