By the time Seidler Equity Partners (SEP) recruited John Schaefer to lead Sportsmans Warehouse out of a Chapter 11 bankruptcy in August, 2009, the Midvale, UT hook-and-bullet retailer had shrunk to 25 from 67 stores. Today, the retailer is back up to 47 locations thanks in part to the purchase last month of 10 of 15 stores it handed over in 2009 to the Canadian cooperative United Farmers of Alberta in lieu of debt payments. All but six of those stores are located in 11 western states, including Alaska.



That deal solidifies Sportsmans Warehouses status as a regional powerhouse, say industry observers. Consider that, Gander Mountain, which has the most similar model among the five national hook-and-bullet specialty retailers, has just one store east of the Mississippi. Bass Pro and Cabelas, which have until recently focused on large and expensive-to-operate destination stores, have only nine and 15 stores respectively in the region, leaving mom-and-pop retailers, Wal-Mart and Dicks Sporting Goods as Sportsmans Warehouses primary competitors.

 

Under, Schaefer and SEP, Sportsmans Warehouse has yet to re-enter the Texas market, thereby avoiding direct competition with Academy Sports & Outdoors, which has become the dominant specialty chain across the Gulf states and is now expanding aggressively in the Southeast. 

One industry source reports that Sportsmans Warehouse cut back the number of sock brands its carries from more than a dozen to four or five, but remains committed to a model that favors national brands over private label. The source said one of the retailers most effective decisions has been to move to a self-service model for lower priced footwear so it can focus in-store staff on providing value-added sales of higher priced products, such as hiking and work boots. 

Reached late last month by e-mail, Schaefer attributed Sportsmans Warehouses growth to disciplined operations, including better inventory management and merchandising. Schaefer honed those skills as CEO of Team Express from 2007 to 2009, as CFO and CEO of Cornerstone Brands from 1998 to 2007 and CEO and COO of Eastbay from 1992 to 1998.

Below are excerpts from his written responses to questions submitted by The B.O.S.S. Report:

BOSS: What’s allowed SW to expand so quickly since the Chap 11 bankruptcy?
SCHAEFER:  I wouldnt call this expansion quick. We developed a plan, fixed our inventory position, rationalized our product offering, developed a comprehensive merchandise and marketing plan and most important, got the right people on board and gave them tools to understand and react to changes in the business.  We then utilized the cash from running our operation profitably on strategically and carefully growing our business and justifying every expenditure and move we made.

BOSS: The company had sales of $741.5 million in 2008 when it was operating 67 stores. It exited bankruptcy in August, 2009 with 29 stores. What are your current sales?
SCHAEFER: We have more than doubled sales since 2010 but we do not give out sales or profit numbers.  We are on our 38th straight month of double-digit same store sales growth.


BOSS: What have been the three biggest changes in how the company operates since the bankruptcy?
SCHAEFER: Discipline in operating the business, inventory rationalization by understanding our customer, getting the right people in place and all going in the same direction. We have 20 percent fewer SKUs due to the SKU rationalization program. While we have cut back on the number of SKUs in certain categories, we have also increased SKU count with key vendors in categories such as men’s, women’s and kids casual clothing and footwear.

BOSS: What changes have been most visible to your customers?
SCHAEFER:  Many-better inventory quantities in the A items, better merchandising of the store layout, new fixtures in many areas, better brands and broader clothing and footwear selection, better trained associates, local advertising and promotions, to name a few. We first needed to determine the A items and properly merchandise these items, then work with the various vendors to get more product based on our merchandising strategy and results.  We also needed to find additional A items and vendors such as Under Armour and prove to them we are a good fit.
 
BOSS: How has this helped improve performance and enhance the Sportsmans Warehouse brand?
SCHAEFER: Since we are not private label focused, we must be brand focused and that means having the best brands in all three categories of the price/quality spectrum.


BOSS: What percentage of SW sales are now online and how does that compare with pre-Chap. 11 period?
SCHAEFER: There were no online sales before Chapter 11.  We added online sales in September 2010.  We do not disclose sales by source.


BOSS: What are you big goals for 2013-2105? 
SCHAEFER: Category expansion, geographic expansion, omnichannel integration, revenue and gross margin growth.


BOSS: What can you tell us about your plans east of the Mississippi, where you operate five stores?
SCHAEFER: There are numerous markets east of the Mississippi where our particular expertise would be valuable to the person who loves the outdoors. To the extent the circumstances and opportunities make sense we will pursue those particular areas aggressively.