Canadian Tire plans to roll out 100 new Sport Chek and Atmosphere locations in the next five years, increasing the amount of retail space in the company's sports retailing division by half.
The iconic retailer acquired a slew of sports-themed retail chains when it took over Forzani Group in 2011. The company on Wednesday outlined its plans to streamline those holdings while adding two million square feet of new retail space.
At the core is a plan to turn the sports apparel chain Sport Chek into a super brand, while consolidating other lines around that chain. The outdoor living chain Atmosphere will also be a part of the expansion.
All in all, Canadian Tire is consolidating nine different retail brands — including Athletes World, Sports Experts, Econosports, Fitness Source and Sport Mart — into three remaining brands, centred on Sport Chek. The outdoor living chain Atmosphere will remain as will National Sports, an Ontario-based chain of 18 locations that has had success selling equipment for hockey and other team sports.
"We see a real opportunity in outdoor lifestyle within Atmosphere," FGL Sports. Ltd. president Michael Medline said on a conference call, explaining the strategy to media and analysts who follow the company. "There's a lot of different kinds of sports."
Single sport stores such as Nevada Bob’s Golf and Hockey Experts will become concept stores within Sport Chek locations.
"Focusing on key banners was necessary for the long-term success of the company," Medline said. "We had a pretty good idea of what we wanted to do back in January, but we took the extra time to do it right."
Plans to retain employees
In total, 115 sports retailing stores under various names will be shuttered, of which 20 will be converted into Sport Cheks immediately. But those closures will be offset over time by more than 100 new corporate store openings planned over the next five years.
"For all store closures, the company will undertake efforts to retain as many employees as possible through transfers to converted or new stores," the company said.
The company didn't provide details of where the store openings would come, but Medline hinted in his comments that Ontario would be a focus.
Per capita, the Greater Toronto Area only has 0.11 feet of Forzani-owned retail space. In the Calgary market, that number jumps to 0.24, "and Calgary is not retailed out," Medline said.
The-pretax cost of the moves is expected to be around $26 million, he added.