Some small running shops are fighting for survival as consolidation, national expansion and online sales grow.
When I was a freshman in high school and just starting to become a running geek, I found my way into a running specialty shop for the first time. Although I had been running cross country and track for a few years before that, my mom typically took me to a traditional shoe store or big sporting goods store to buy running shoes.
Back then, the running shoe industry was still in its infancy (and so was shoe design), but there was still a world of difference between the massive sporting goods stores and the small specialty run shops that began popping up in the Chicago-area. Sure, big box stores like Sportmart or Herman’s Sporting Goods or Morrie Mages Sports had loads of product, good prices and huge sales, but no one knew a thing about running. Certainly no one at those places knew the difference between the original Adidas Oregon lightweight trainers and a pair of Nike American Eagle racing flats.
As soon as I set foot inside the Competitive Foot in Western Springs, Ill., a whole new world opened up to me. First, most of the store was dedicated to running—shoes, socks, wind jackets, skimpy nylon split shorts and accessories—and the people who worked there were actually runners. This was before any hydration accessories, running tights, compression socks or energy gels existed, but I remember always seeing race entry forms for local events like the Western Springs Tower Trot, a few running magazines and one of those famous “There Is No Finish Line” posters from Nike hanging on the walls.
When I was a kid, that was my candy store.
The store was owned by Tim and Tyna Eggert, who opened it in 1974 as the first athletic footwear store in Illinois. Three years later, they added a second shop a few towns away in Oak Park. As the original running boom of the 1970s and 1980s took off, so too did their stores. They got most of my business in the 1980s because they offered high school runners a 10 percent discount, but it wasn’t like I needed my arm twisted to go there.
But times have changed quite a bit in the world of running retail and, after 40 years, the Eggerts are ready for retirement. They closed down the Western Springs shop last year and will be closing the Oak Park location on July 20. They had a few feelers to sell the business, but the numbers didn’t add up so they’ll walk away after 40 years with bare shelves and the satisfaction of having worked with great people and customers for four decades.
“It’s been a good run, but retail can be a tough grind. You have to pound it out seven days a week,” Tim Eggert says. “It’s a little bittersweet, but we’re ready. We weathered a lot of storms and worked with great people in the community and our staff through the years and that’s a big part of what’s made this so enjoyable.”
As a recreational runner and someone who has been invested in the local community, Eggert, 65, says he’s had the best job in the world, but he also admits operating a small running shop is mostly a labor of love. For years, his typical week has included displaying new running shoes and apparel, ordering new running gear, talking to customers about their training and injuries, joining the shop’s fun runs with local runners and generally creating an enjoyable place for runners and walkers to visit and be inspired about their health and fitness.
The labor of love is shared by roughly 800 small, privately owned running shops across the U.S.—including nearly 40 in the Chicago area—and has been since the late 1970s when the first running boom led to the advent of running specialty stores. Those running shops have been the lifeblood of the running industry and the sport for more than 35 years, providing a sense of community and spreading the knowledge and passion to all levels of runners.
Yes, many have had a runner-geek quirkiness to them—sometimes more than merchandising, marketing or business sense—but that’s the culture of running that has thrived for decades.
But now that foundation is being challenged on many levels. Eggert believes catalog sales and online sales put a big crimp into his business in recent years, and now consolidation, expansion and other forms of competition are posing a threat to many other small running shops around the U.S.
“[Catalog and online sales] are tough to beat, especially when they offer free shipping and the chance to try shoes at home, wear them for 60 days and return them,” Eggert says. “That’s tough, but that’s competition for you and you have to work through it. It’s a different world than when we opened in the 1970s. Times have changed.”
Decades of Change and Growth
As a sport and as a recreational activity, running has changed and grown considerably since the 1970s. It’s been a huge business since the early 1980s when roughly $100 million in running shoes were sold annually. That’s a drop in the bucket compared to what it is now. In the past few years alone, annual sales of running shoes have increased from $2.32 billion in 2010 to $3.09 billion last year, according to a recent report from the National Sporting Goods Association. In terms of units, 46.2 million pairs of running shoes were sold last year, up from 37.1 million in 2010.
Running has grown and continues to grow because it’s become more accessible to a growing number of people—especially women, says Kris Hartner, owner of two Naperville Running Company stores about 25 miles west of the Competitive Foot store in Oak Park. Whereas running used to be primarily about hardcore athletes training to run fast races, now a much wider part of the population is running (or walking) than ever before, he says.
“The big difference, over the past 15 to 20 years especially, is that running has gotten so much larger,” says Hartner, whose original store in downtown Naperville was named the 2013 Running Store of the Year this past December, the second time in five years it won that national honor. “There are more people running, there are more brands and there are many more stores and more kinds of stores that sell running shoes.”
As a result, many small stores have seen their annual sales double or even triple over the past 10 to 15 years, with growth so fast that small, privately owned shops can barely keep up. Yet, as much as it’s fun to live your passion every day, going it alone as a mom-and-pop store isn’t easy these days.
Obviously, the pie is much bigger and many small stores have thrived because of it, but now there are also more businesses aggressively trying to gobble up a larger slice. Price and convenience appear to have started winning out over the hands-on customer service and authentic running atmosphere of running specialty stores. But what is the long-term effect of that? To some small shop owners, the short-term results are already painfully obvious. Running shoe, apparel and accessory sales have declined at running specialty retail shops each of the past two years, a sign that customers might be shopping elsewhere.
Although those small privately owned brick-and-mortar stores have always been challenged by large sporting goods stores and catalog sales, in the past several years online running stores (such as RunningWarehouse.com and RoadRunnerSports.com), online shoe retailers (like Zappos.com) and perhaps even worse—online closeout stores—have played a role in reducing walk-in traffic at specialty shops. A recent report from Running USA noted that 14.1 percent of running shoe sales came from specialty shops last year, down from 19.6 percent in 2011 and 18 percent in 2012. At the same time, online sales increased from 12.2 percent in 2010 to 18.1 percent last year. Is it a trend that can be reversed?
It doesn’t help that most (but not all) shoe brands sell directly from their own websites, a tactic that means small specialty retailers are also competing with the same brands they’re selling in their stores. But what’s the most unsettling news of the past year or so to many running shop owners is that Amazon.com, the world’s largest and most successful online retailer, has recently made a big push into running shoe sales.
If that’s not enough, there are both consolidation and expansion movements afoot in the running retail industry. In the past four years, Denver-based Running Specialty Group (RSG) has bought up or started up 76 stores in a partnership with The Finish Line Inc., a publicly traded Indianapolis company that owns and operates 850 Finish Line mall-based retail stores around the U.S. (In April, The Finish Line took a greater ownership stake in RSG, reducing the ownership role of Denver-based Gart Capital Group that helped it grow over the previous two years.) Meanwhile, Fleet Feet, another national brand, has also bought or partnered with numerous independent shops to strengthen its base of 128 stores.
Many of the original or secondary owners of some of the country’s best running shops are at or nearing retirement age, which is why so many have agreed to sell to RSG or Fleet Feet. For example, Bob Roncker, one of the pioneers of running specialty retail, sold his three successful Cincinnati-area Bob Roncker’s Running Spot stores to RSG last fall, while Johnny Halberstadt and Mark Plaatjes sold their three Boulder Running Company stores to RSG last spring. On the other hand, John Rogers, a highly successful running shoe store operator in Maine, agreed to a partnership that converted his two thriving Maine Running Company shops into Fleet Feet stores last year.
Amid all of that consolidation, other national running store chains like Road Runner Sports and Endurance House are continuing to grow and expand, while bigger sporting good stores like Dick’s Sporting Goods and Sports Authority are trying to get a stronger foothold within the ever-growing population of recreational runners, both in their “big box” stores and in their new smaller, quasi-specialty concept shops. (Dick’s began opening True Runner shops in 2012, a little after Sports Authority Elite stores began popping up.)
The changes seem to be mostly benefitting runners—they’re able to get shoes and gear at more physical stores and also at numerous one storefronts. Price, style, color, size and more are all at their fingertips, even if good customer service is only at small specialty shops. It’s certainly a key element in the equation for many transactions, but shoe-buying runners are also driven by other factors in life, namely the increased busy pace of life in today’s society and the ease of online shopping. As they saying goes, “the customer is always right,” including about how and where they spend their money.
The combination of all of these things begs the question: Are small, privately owned running specialty shops trending toward extinction? I personally hope not—because that’s where core running culture thrives—but it’s getting harder and harder for some shops to survive despite continued massive growth in running.
[Note: Competitor supports the Independent Running Retailer Association and works with Running Insight trade magazine to select and promote the 50 Best Running Stores in the U.S.]
“It’s A Lot Of Hard Work”
“Yes, it’s a lot of fun,” Guerra says. “But it’s a lot of hard work too.”
Of the 128 Fleet Feet stores in the U.S., most are franchises like Guerra’s, but some are wholly owned by the privately held Carrboro, N.C.-based company. As a franchisee, Guerra’s store can get direct assistance from the Fleet Feet corporate office in several areas, including merchandising, finance, employee training and in-store programs. While that’s certainly a huge asset, it doesn’t begin to offset the competition her store faces from all angles.
Less than 2 miles away from Fleet Feet, there’s a 9,000-square-foot Boulder Running Company store, an internationally renowned shop now owned by the powerful and growing RSG in Denver. Boulder Running Company’s original Boulder store has been one of the highest-grossing and most influential stores in the country since Halberstadt and Plaatjes founded it in 1996. The saying in the running industry has long been that “if you can sell it at BRC, your product has a good chance to make it nationally.” (RSG bought the three Boulder Running Company shops in Colorado for a reported $7.4 million in June 2013.)
Also in Boulder, Sports Authority Elite, a running and running/fitness concept shop operated from one of the country’s largest sporting goods retailers, sits about 3 miles away from Guerra’s Fleet Feet shop. Furthermore, Newton Running, which is headquartered in Boulder, operates its brightly colored flagship store and gait lab just six blocks away on a well-traveled pedestrian corridor of the city’s downtown shopping district. A large REI store, In-Step Active Footwear & Insoles and The North Face store are among the other stores that sell running shoes in Boulder.
Despite the local and national competition, Fleet Feet Boulder recently celebrated its 14th year in business, a testament to the passion of Guerra (who has owned the shop outright for the past three years) and her staff and the knowledgeable and personal service they offer to anyone who walks through the door, but also to the community connection the store has developed. Kathy Hawk started the shop on tourist-heavy Pearl Street a block off of Boulder’s renowned pedestrian mall in 2000 but moved to its North Boulder neighborhood location a few years later.
The smallish shop, roughly 1,000 square feet, sits next to an equally quaint flower shop, an ice cream shop, a coffee shop, a bagel shop, a dry cleaners and a bakery/restaurant—all locally owned. But, like each of those other stores, Guerra’s shop thrives because it has become part of the local community. It has a friendly, neighborhood feel to it, and the store’s weekly fun runs, training groups and friendly personal service help it overcome its small space.
The store’s low-key celebration was indicative of its community roots—it organized a Monday night fun run that included running to a landmark restaurant for a hot dog, running along part of Boulder’s notable creek path, running up and down a spiral slide in a local park, stopping at a local bar for a beer (strictly optional) and finishing with ice cream (almost mandatory) from the neighboring shop.
Boulder Running Company’s Boulder store is still a great shop, offering an enormous range of apparel and shoe brands and styles. But the changes resulting from last year’s purchase by RSG are starting to be felt. That company, which now owns 59 running shops around the U.S., is centralizing much of its buying, marketing and inventory systems while also using its Run.com online store to interface with regional customers using a geo-targeted interface. (Depending on where you’re logging in from, you’ll be connected to the brand’s local stores and events in that area, but online sales are coordinated from its national operations.) And, like The Finish Line stores, it’s using its online site as a way to drive in-store traffic and sales. (For example, same-day in-store pickup of shoes.)
RSG opened a massive 17,000-square-foot Boulder Running Company shop in the Cherry Creek shopping district of Denver in April, but that store has less of the local, community feeling that the company’s Boulder, Colorado Springs and Littleton, Colo., stores and more of a large, innovative concept shop. Plus, the original Boulder store has recently undergone personnel changes, with longtime shoe buyer Henry Guzman being let go on the account of his position being eliminated and original owner Mark Plaatjes resigning his post as the store’s senior employee two weeks ago.
So what’s next? The owners, operators and managers of all of the Fleet Feet stores around the U.S. met in St. Louis last week to discuss all things pertaining to the running retail business. That will likely include trends in footwear (from minimalism to maximalism), the brand’s updated system-wide shoe-fitting process, discussions on how to compete with online retailers and plenty of vigor about the importance of customer service.
When it comes down to it, Guerra knows she’s in business to help her customers with their running and fitness needs. That might mean finding shoes for a first-time runner, organizing fun runs and training groups, special-ordering a pair of track spikes for a high school high jumper or even offering encouraging support to an elderly woman running a 14-minute mile in a community track meet, which Guerra instinctively did without fanfare just last week.
“I tell my staff all the time, the biggest thing we need to do best is provide exceptional customer service,” she says. “We really need to be able to address the needs of the runners walking through the door. This is not just about selling them shoes. It’s about engaging each and every customer in a friendly, accessible way to see what they need.”
Guerra points out that, in addition to customer service, specialty shops like hers offer the ability to try on and compare several shoes at once so a customer can leave knowing they definitely have the right shoe for their needs. Plus, her staff can advise customers about apparel, hydration accessories, recovery tools and injury prevention devices by asking a few questions. Furthermore, they can engage their customers in friendly conversations about running that have nothing to do with selling product.
“That’s something you can’t get online,” she says.
It’s not all doom and gloom. Hartner opened his second Naperville Running Company store in March, a 3,800-square foot shop at the south end of town, after nine years of operating his first 5,500-square-foot shop in Naperville’s downtown shopping district. While Hartner admits there is added pressure because of the many changes afoot in the industry, he says he can only focus making his business as successful as possible. He agreed that the bigger brands have more leverage with the shoe vendors when it comes to pricing, inventory and sales resources, not to mention access to a much wider customer base online.
Yes, running has changed and so has the running industry, Hartner admits. Ultimately, though, he believes there will always be a space for exceptional specialty running shops. In other words, the strong will survive. But those shops have to know as much about marketing, merchandising and business operations as they do about running shoes and marathon training.
“We can only control what we do,” Hartner says. “If we put our energy into our connection to our local community and focusing on trying to run a smart business as best we can, I think we can all co-exist.”