Retailer Spotlight: Q&A with Marty Hanaka, CEO, City Sports
A change at the top has given new energy to Boston-based specialty retailer City Sports. In July, the company tapped veteran retail executive Marty Hanaka as CEO. He replaced Edward Albertian, who resigned in June.
[quote-from-article] Hanaka, who has sat on the board of directors of City Sports since 2008, brings years of experience to his new post. He is no stranger to sports retailing, having previously served as chairman and CEO of Golfsmith International Holdings Inc., and Sports Authority. Most recently, he was an operating partner at the Highland Consumer Fund, which acquired City Sports in 2008. (Hanaka also put in a stint as interim CEO of Guitar Center Inc.)
Currently, City Sports operates 26 locations in the Northeast. The stores offer a comprehensive assortment of performance footwear, equipment, and apparel from leading brands in a high-service environment.
Chain Store Age editor Marianne Wilson spoke with Hanaka about his return to retail and his plans for City Sports.
What made you decide to step back into the retail arena full time?
I was semi-retired for while, and active on a number of boards, including City Sports. I craved the excitement of rolling up my sleeves and getting back into running a business again.
This is one of the most exciting chapters/episodes of my career. City Sports is at an inflection point with the changing face of retail, the rise of social media, and the shift toward omnichannel. We are on the front lines, adapting as customer behaviors change and evolve.
What are your thoughts on the current state of retailing?
Retailing is changing at a pace we haven’t seen in decades, and that’s what’s so exciting for me personally about being back at the helm of a retail brand right now. It’s all about omnichannel and serving the customer, wherever and however they chose to interact with us – whether it’s on a mobile device, a desktop, or in one of our stores.
Delivering a consistent and unified experience across channels has become a baseline standard for retailers today. Customers expect to be able to check online if an item is available in store before making the trip to the retail store. In our time-strapped culture, convenience and efficiency is top of mind.[pb]
Where does the physical store fit into all this?
The retail store itself continues to play a critical role. Customers still want to touch and feel the product. They expect high levels of customer service in stores, and City Sports is able to deliver on that with things like free gait analysis to help people find that perfect pair of running shoes, and complimentary tennis racquet stringing. We strive to exceed customer expectations with in-store services, knowing that there is more choice than ever in retail today.
We find that customers are looking for those connections we often miss out on when we are constantly attached to our smart phones: whether it’s connections with store associates, with the brand, and with other consumers.
At City Sport, we’re seeing great participation rates in grassroots events like our weekly run clubs, and our in-store and outdoor bootcamps. We’ve been holding run clubs for years and years, and just in the past year or so, we’re seeing lots of other retailers following suit. There is an appetite for community and connection through retail that’s catching on in a different way.
As the new CEO, what will you be focusing on in the near term?
My top priorities this year are upgrading our systems to deliver on the promise of the omnichannel opportunity, and giving our associates the tools they need to be successful. Also, executing remodels at key retail locations, such as our flagship store on Boylston Street in Boston’s Back Bay.
Most of your experience has been with large national retailers. How does that translate to a smaller player like City Sports?
I had been involved with City Sports as an advisor and board member for seven years prior to taking the role of CEO, so I’ve had a lot of experience with the brand.
Also, I’ve been able to draw upon my experience as CEO of Golfsmith and The Sports Authority very heavily in this current role. Golfsmith was one vertical category where we had true specialties, not dissimilar to City Sports.
How is City Sports positioned in the market?
We occupy a unique space in the market, that being the strategic white space between specialty running shops that carry exclusively running footwear and apparel and the big sporting goods stores.
Our running footwear specialists are second-to-none in terms of product knowledge and training. And our gait analysis services are right up there with the specialty run shops. At the same time, we cater to a range of activities beyond running, such as tennis, outdoor, fitness, tech, swimming, and team sports. So while we lead with footwear, we’re able to meet a whole range of needs for our customers.
What is the company’s average footprint?
Our stores average about 8,000 sq. ft. to 10,000 sq. ft. They are large enough so urban athletes can find what they need while not feeling lost in a sea of product.
With the growth of our online business and in-store iPad ordering, our comparatively small format stores are more effective than ever. If we don’t have the style, size or color a customer needs, we can have it shipped the next day for free.
Also, with in-store iPad ordering, we effectively have an assortment as big as anyone in the business. This is why omnichannel retail is such a game changer. Our goal is to be able to offer a so-called “endless aisle” of product, where customers would be able to access an almost limitless array of colors, sizes, and styles from our in store iPads as well as from Citysports.com.
What’s going on expansion wise?
We opened a store in September, in Mosaic District, a vibrant urban lifestyle center in Merrifield, Virginia, about 15 miles outside of Washington, D.C. We’re thrilled to be expanding our presence in the DC metro area, where we now have seven retail locations.
Our bias this year is toward investing in our core business and existing stores rather than increasing the number of doors. We’ve found that store remodel investments pay off in spades, so we’re pursuing three store remodels post-holiday, in early 2016.[pb]
Looking ahead, will City Sports pick up the pace of expansion? Any plans to venture outside the Northeast?
Yes, in the longer term, we are looking at expanding to other regions. We see huge expansion opportunities for City Sports, especially in cold weather markets and even Canada.
For the time being, we are focusing on upgrading and remodeling our existing store portfolio and on realizing the full potential of the omnichannel opportunity. We have a wonderfully loyal, dedicated customer base, and we want to be sure to meet them wherever they choose to engage with us – whether that’s in one of our retail stores or online at Citysports.com.
Tell us more about your omnichannel strategy.
Investing in our online pl