Sport Chalet sees e-commerce surge

A 32.4% increase in online sales was one of few bright spots in regional sporting goods retailer Sport Chalet’s second quarter.

During the period ended September 29, the Los Angeles-based chain said sales declined 5.2% to $86.7 due to a 2.5% same store sales decline, the closure of three underperforming stores and weakness in its team sales division due to changes in personnel. The negative factors were offset by strength in the online business and the opening of one new store. Sport Chalet ended the quarter with 52 stores.

"Our second quarter had a disappointing start, as sales trends were weak in July and August, but turned positive in September on a comparable basis," said Craig Levra, chairman and CEO of Sport Chalet. "Sales trends have continued to improve as we progressed into fall, and our team sales division is also beginning to move into positive territory.”

In the absence of top line sales growth, the company reported a net loss of $3 million, or 21 cents a share, compared to a profit of $800,000, or five cents a share, during the second quarter the prior year.

The retailer is optimistic business results will improve and pointed to what it calls a next generation store that opened in June in downtown Los Angeles. The store has delivered significantly better than average sales per square foot and gross margin than the chain as a whole, according to the company. The flexible store format allows for the continual adjustment of the merchandise mix to appeal to the downtown customer base, and early results are said to have exceeded expectations.

“With additional capital, we believe there is enormous sales growth potential in rolling out this next generation format across our existing store base through a strategic remodel program, and opening new next generation stores in both our core markets and new geographies,” Levra said.

He added that the company has taken significant steps over the past year to accelerate its growth strategy, including the recent engagement of a financial advisor to help secure growth capital and the addition of new talent to the board and online division.

“We continue to navigate the choppy retail environment, and we are concentrating all of our efforts to maximize sales while containing costs,” Levra said. “We are optimistic that our premium brands and quality merchandise, best-in-class service, and our 'expert' staff engagement with customers position us well for success in the coming holiday selling season."