Having survived a five-year profit drought as well as a nearly snowless winter, La Cañada Flintridge-based Sport Chalet turned a corner last quarter and is updating its retail strategy for the long haul, Chief Executive Craig Levra told shareholders this week.
Levra spoke to about 50 shareholders at a quarterly meeting a week after the sporting goods retailer announced a $100,000 profit in the quarter that ended July 1, only the second time in the last five years the company has had a profitable quarter. He emphasized the retailer's efforts to streamline logistics, focus on new technology to improve sales, and plans in May to open the company's first new store in five years — a location at Figueroa and Seventh streets in downtown Los Angeles.
‘We're looking at how customers will shop 2017, and building that into our new store at Figueroa and Seventh,” he said. “It's a next-generation store prototype, with full integration of technology … it won't look like any other Sport Chalet store. We can't wait to get it open.”
The store will feature a reconfigurable “expert bar,” where customers can learn more about the equipment they buy.
Sport Chalet, which operates more than 50 stores in California and the west, also saw online sales increase by 22% in the quarter that ended July 1, compared to the same period a year earlier. In June, the company projected having a profitable year in fiscal 2013.
Sport Chalet shares were listed Friday at $1.59, off the 52-week high of $1.99 but above the 52-week low of $1.05.
Levra said that after a promising start to the year, the company struggled during the winter as light snowfall iced sales of ski equipment.
“The lack of snow over winter months presented enormous challenges to our company,” he said. “Lake Tahoe had its lowest regional snowfall since 1880.”
Levra said that the company mitigated the damage by renegotiating some of its leases and shifting to summer wares sooner than usual.
Not all shareholders were satisfied. Frank Kaden told Levra that he's suffered a $12,000 loss on the 5,000 shares he purchased in 1985 — before the company was publicly listed in 1992. Kaden asked Levra why the company doesn't bring in fresh leadership.
“Look at your competition, Dick's, Big 5, Sports Authority — their stocks have done well,” he said. “If we got some new blood in the directors' chairs, some new experiences, they might bring some new ideas.”
Levra noted the company is innovating, and said Sport Chalet has survived as a mid-size chain while industry trends have favored only mega-chains or single-store competitors.
“Every company our size is gone, out of business, done,” he said. “As sales improve, we'll go back to opening stores and more investment.”
He also promised Kaden would get his money back, one way or the other.
“The minute I can do it, I'll get you out of that hole, personally, not the company. I will make you whole on your investment,” Levra said.
Elizabeth Calciano, a La Cañada resident and shareholder, asked Levra why the company doesn't issue dividends.
Levra said the company never intended to provide value through dividends, but that founder Norbert Olberz envisioned reinvestment of profits to grow the business.
“This company doesn't pay dividends. We take the cash we earn and invest it for growth, which is what we've done from the day Norbert took us public,” he said.