While most retailers consider places like Cape Girardeau, Mo. and Kingsport, Tenn. below their notice, Hibbett Sports Inc. is happy being the only game in town. The Birmingham, Ala.-based sporting goods retailer prefers playing in secondary and tertiary, away from the big box competition.
“Less than 15 percent of our markets would be potential markets for the big-box operators like The Sports Authority and Dick's Sporting Goods, and if there is a competitor, it's usually a small local guy who's been there for years,” says Jeff Gray, director of real estate of Hibbett Sports.
Today, Hibbett has 693 stores in 23 states, the majority of which are located in the southeast, although the stores stretch as far west as Arizona and as far north as Iowa. The company is focused on markets that have shown strong population growth previously and promise future growth, Gray says. It tries to avoid markets where it would compete head-to-head with Dick's or The Sports Authority.
In 2008, Hibbett will open 75 new stores as part of an aggressive expansion plan that will nearly double its locations to 1,200 by 2013, Gray says. But, the company hasn't always been on such a fast track. In fact, when he joined the company in 1990, the retailer had just 32 stores — most of them in Alabama.
Hibbett has stores in markets that are as small as 3,000 residents, although the typical store is situated in a market with 40,000 residents and produces $850,000 in sales out of 5,000 square feet. Hibbett went public in 1996, and since 2002, the sporting goods retailer has increased its store count by 15 percent or more. It expects to grow by 11 percent per year moving forward, preferring to expand into markets that have at least 20,000within a five-mile ring and retail sales of $300 million in the trade area. The retailer hopes to enter new states in the near future and is currently looking at Colorado, Delaware, Maryland and Wisconsin.
Hibbett's modest store footprint works in both malls and shopping centers. Currently, the retailer has 223 mall-based stores and 470 neighborhood center stores. It prefers projects that are anchored by Wal-Mart or Target or junior department stores. While Wal-Mart and Target may stock similar merchandise, Gray points out that Hibbett sells brand-name, specialty athletic equipment at higher prices. “The big-box discounters end up bringing more business to us than they take away,” he says. To date, the company has identified close to 400 potential markets in its existing 23-state footprint.