The retailers new CEO hopes to make some changes quick in the retailers home town as they prepare for the arrival of Dicks Sporting Goods as it makes moves to better define what the Galyans brand stands for outside of Indianapolis.
Ed Holman, until last week the president and COO of Galyans, assumed the CEO role following the resignation of chairman and CEO Bob Mang.
“(Our) biggest challenge is establishing a brand,” said Holman in an article in the local paper. “People outside of Indianapolis often don't know what Galyans is or what it sells,” Holman said in the report.
The first move will reportedly involve changing the name of the company to Galyans Sports & Outdoors from its previous moniker. The name change is expected to reflect the retailers higher emphasis on athletic product as it reduces its dependence on the outdoor end of the business.
Holman said the company needs to educate the consumer that Galyans “both more upscale than other similar stores and price sensitive”, Holman said in an interview with Dow Jones Newswires.
Holman also said they would cut the number of SKUs and attempt to go deeper in those items. He also indicated in published reports that Galyans has made some strategic missteps in expanding its national presence too quickly.
“We went from Boston to Las Vegas to Minnesota to Dallas and Atlanta,” he said in an Indianapolis Star report. “We have really stretched our infrastructure in going from a regional retailer to a national retailer.”
The far-flung expansion reportedly put too much strain on the marketing budget of the company, often having to support single stores in many major markets. The strategy was very different from competitors like Dicks or The Sports Authority that go into a market with a store and then backfill quickly to spread the marketing spend over multiple rooftops in the same market.
The new strategy is expected to reduce the number of new store openings. Galyan's has 44 stores in 20 states and is scheduled to open eight stores in fiscal 2004. Those deals are expected to proceed since agreements have reportedly been signed for each, but look for expansion to slow going forward.
The company said Mang resigned for “personal reasons”, but industry watchers were expecting the move for some time as Galyans comp store sales results continued to decline as the rest of the sporting goods sector saw nice gains in the back half of last year. There has also been a steady stream of talent leaving the company for greener pastures, with many pointing to the corner office as the reason for their exits.
But Mang sounded a little bitter in published reports, with one quoting him that he had “worked his tail off at this place” for the last three and a half years. “I've had to cancel vacations,” he said in the report. He said it was “just time for me to get refocused on my family”.
The changes that Holman is putting in place will also cause some pain. The company said it was going to make changes in the current management structure which are expected to cut twelve positions from the HQ team. They are also reportedly cutting some other management-level positions nationwide.
“Employees who were affected by this change were offered the choice of continuing their employment with Galyans in hourly positions,” Holman said in a report. “Employees who did not select this option will receive a severance package.”
One position that will need to be filled is the Chief Merchant role that Mang held himself. The company is now actively search for a new Chief Merchandising Officer to run marketing and merchandising.
Answering questions from Dow Jones, Holman said he didnt think Galyans would be a very good strategic acquisition candidate. “Our format doesn't really fit for any of our competition,” Holman said in the report.
>>> We doubt anyone would buy the stores for their format, but the real estate might make sense
>>> Dicks wont need the real estate in Indy either after they open three stores there next month. The ensuing turf battle looks to be bloody — and very promotional…
