TRENDS

Dealers React To COVID-19 Crisis

Optimism mixed with apprehension dominate as dealers await the fall season.

Bizarre, unprecedented and unexpected. Those are three words that may best describe the state of affairs in team sports due to the COVID-19 pandemic. The ramifications are citywide, countywide, statewide, nationwide, global. They are certainly local and nobody feels the team sports financial pinch more than the team dealers who serve as that all-important link between vendors and the end users. To say that COVID-19 has thrown the sporting goods industry a curve ball is an understatement. It’s more like a sinking, swerving knuckle curveball covered in spit — impossible to hit or catch, or predict. While every dealer has been heavily impacted, each has his or her own story to tell. In many cases, their local seasons came to an abrupt end, just minutes before the tip-off of basketball games, the start of a track meet or the opening pitches of baseball and softball games.

The domino effect started as soon as the NBA announced an immediate postponement of its 2019/20 season on the evening of March 11. Within 24 hours, Major League Baseball halted spring training. The trickle-down effect in all sports at all levels was quick and dramatic — guillotine-like, in many cases.  Sadly, that trickle-down reached all the way to youth sports.

Since mid-March, team dealers have been attempting to do what they can to positively react to the COVID-19 crisis and to be as ready and prepared as possible when sports start being played again, at any level.  Three team dealers in Florida – where, it seems, sports are played 24/7/365 – are feeling the financial pinch of this COVID-19-induced sports stoppage. “For local spring recreation leagues, families registered for a team that didn’t play, paid for a season that didn’t happen and paid for a uniform that was not worn,” says Becky Whipp, co-owner of Dave’s Sporting Goods, Vero Beach, FL. “Our end-of-spring awards business has been affected considerably. It is what it is. It’s all quiet right now.” Fortunately, high school baseball and softball in Florida had started earlier than in other parts of the country and at least those teams were able to wear the uniforms and use the practice gear they had purchased and dealers had delivered.  But, Whipp admits that spring sales for 2021 will be slim, at best. Yet she remains optimistic.

“School sports and travel sports will rebound quicker than local recreation leagues because athletes on school teams are more passionate about playing,” says Whipp, who sells to seven local high schools. “Travel athletes are fanatics. People get past things pretty quickly.” In the greater Miami area, school budgets remained in lockdown through most of the spring, just like the schools themselves. “Many public schools have put a hold on spending, for the time being,” says Joel Dunn, salesman at Performance Team Sports in Miami. “As for private schools in south Florida, their spending is frozen because they don’t know about their enrollment for the fall, which has a direct impact on their spending.” Dunn is now focused on the future of school sports in south Florida. It’s accurate to say that he’s cautiously optimistic. “If there are no sports in the fall, I’m in trouble,” says Dunn. “A lot depends on how well the opening of the economy goes.”

To be ready when that reopening does come, Dunn remains in touch with his key clients on a daily basis. “Coaches and athletic directors are contacting me for pricing, but they are not ready to pull the trigger on ordering what they need. That decision is being made by key administrators at each school,” says Dunn. “Most of the coaches, though, are planning to return this fall.” If you look at the front door of Scotty’s Sports Shop, a retailer/team dealer in Wellington, FL, owner Jerry Steurer clearly explains his store’s response to COVID-19: “For 30 years, we have equipped this community in all their sporting goods needs and have strived to keep the health and safety of our customers at the forefront of our store policy.  Since learning of the COVID-19 pandemic, we immediately began implementing additional cleaning methods in order to sanitize our store and make every effort to keep our customers protected. “We obey World Health Organization guidelines for hygiene by following strict hand-washing practices, sanitizing all surfaces throughout the store, wiping down countertops, cash registers, credit card terminal and door handles (inside and outside) after every customer. We thank you for your loyal support and wish you and your loved ones will remain unscathed by this unprecedented situation.”

Entering Survival Mode

As a result of COVID-19, the store hours for Scotty’s are reduced – only 25 hours a week – which consequently severely impacts revenue. The coronavirus pandemic also caused East Valley Sports, Mesa, AZ, to cut back on its hours of operation:  9:30 am – 1:00 pm  from Monday to Friday, by appointment only, and closed on Saturdays.  Meanwhile, in Holyoke, MA, every day is a struggle at Holyoke Sporting Goods, according to owner Betsy Frey, who has owned the business since 1994.  “I’m in survival mode,” says Frey. “We’re in the survival-of-the-fittest mode.” For Frey, her daily effort is strictly focused on the bottom line:  maximizing revenue and cutting expenses.

“Every day, I come to work, even though we are officially closed,” says Frey. “I’m focused on reducing my costs, moving inventory, collecting receivables, canceling orders, attempting to send orders back and selling stuff online. While we are closed, I use Facebook and email to advertise specials. The other day when it rained, I sold 11 umbrellas. I advertise curbside pickup, which is allowed. For one customer, I personally delivered what she bought to her home.”  It’s fair to say that if Papa John’s or Domino’s Pizza can deliver pizzas, then Frey’s Sporting Goods can deliver sporting goods.  And, Betsy Frey is doing just that. Holyoke Sporting Goods has been closed since Monday, March 16. That was a bad time to stop and turn off the cash register. “The timing of the closure was horrible because I had purchased many sweatshirts and T-shirts to sell for the upcoming local St. Patrick’s Day parade and celebration,” says Frey. “That parade was cancelled.”

The sweatshirts and T-shirts remain unsold and sitting in her inventory. There’s always next year. “Losing those sales just killed me,” says Frey. “It was the absolute worst time of the year.” For Frey’s sake, hopefully, there will be a local St. Patrick’s Day parade in 2021. Frey and other non-essential local businesses in Massachusetts were closed until at least mid-May and her two employees remain laid off. Despite all the bad news, Frey does have some good news to report.

“We had great early spring weather so I was able to deliver baseball and softball uniforms and equipment to all my high schools, except one,” says Frey. She also has high praise for Sports, Inc., which she says “has been wonderful by keeping us informed by negotiating better terms with vendors and securing extended dating.” While Frey truly appreciates the assistance from her buying group, she realizes that her store’s survival will be up to her ability to hang in there. “I do not expect the federal government to bail me out, but any help is much appreciated,” says Frey. As for the local athletic COVID-19 casualties in Holyoke, spring baseball for boys and softball leagues for girls were cancelled.  That represented at least 500 team shirts for boys’ baseball and 200 team shirts for girls’ softball that weren’t sold — and those sales will never return.

Next on Holyoke’s calendar are football and soccer  — football starts on August 1 and soccer practices start in mid-August.  Frey sells to children in both programs, plus cheerleaders for football. Local parks, where those football and soccer games and practices are held, remain closed till July 1. Assuming school and local recreation league sports start resuming play in the fall, Frey thinks her sales will be slim next spring because schools won’t need to buy anything new, with the exception of footwear for young baseball and softball players. “Everybody’s going to grow and will need new cleats,” says Frey. While her store has only been closed since mid-March, Frey is ready for a return of some semblance of normalcy. “I am not meant to work alone,” he says. “I need to work with people.”

Needing to Work

Betsy Frey is not the only one who feels that way. “It’s not healthy to be home all the time,” agrees Doc Claussen, manager of Coaches Corner, Terre Haute, IN. “You have to get out to smell the air.” Claussen was one of the early employment casualties of the COVID-19 pandemic — he had five weeks of unemployment. Now, he’s back in the office overseeing curbside pick-ups and making deliveries of products, gear and uniforms to schools, which represent 95 percent of the business for Coaches Corner. “COVID-19 has felt like a swift kick in the bottom,” he says. Claussen and his associates are playing the wait-and-see game, as they await decisions by Indiana Governor Eric Holcomb to find out when games will resume in the Hoosier state. But one thing is for sure — the athletes are missing the competitive action on the fields, courts, diamonds and tracks. “The kids just want to play,” says Claussen. And clearly, coaches want to coach sports, athletic directors want to organize sports and team dealers want to sell sports. Yet Claussen expects a slow return to normal.

“I won’t be surprised if Indiana has shortened volleyball and football seasons this fall,” says Claussen. “I see those sports starting late. But, tennis and golf this fall should be okay.” Not surprisingly, Claussen’s interactions with coaches are not like they used to be. “The other day, I talked with a local football coach who was out fishing in his kayak,” says Claussen.   He is also worried that high school sports in Indiana, in the short-term, might change. “I have heard talk of having baseball in the fall and football in the spring,” says Claussen, who reports that American Legion baseball in Indiana had already been cancelled this summer. Claussen feels that all high school sports teams in Indiana cannot be treated equally.   “Schools in northwest Indiana, which are close to Chicago, may need to be treated differently than schools in other parts of the state that are somewhat isolated,” says Claussen. Whatever may be the case, life will be different.

“There will be a new level of normalcy for us,” says Claussen. “Personally, I’m a hand-shaker and a hugger. I’ll have to read people before I engage. There might be more elbow bumping now.” The national shutdown has impacted both his day job as a team dealer and his evening job as a high school sports official — he is a high school official in football, basketball, wrestling and baseball, but like many others didn’t get a chance to officiate his normal allotment of baseball games this spring. From a business perspective, Claussen feels the lost season of Spring 2020 will take at least two years to recover from since sales in Spring 2021 will be slim because of unused gear. No games played means no demand for new baseballs and softballs. When all is said and done, Claussen feels the current pandemic will teach everybody a valuable lesson. “In time, all this will pass. I hope we all become better human beings and try to treat others with respect,” says Claussen. “Time will tell.”

From Selling Balls to Masks

In the Bluegrass State, Duke’s Sporting Goods, Elizabethtown, KY, is doing what it can to respond to the current pandemic and prepare for the immediate future. “The coronavirus has shut down our business since March 21,” reports co-owner Tony Carter. They are still selling some sporting goods online, with a curbside pickup, but are also selling non-sports products. “Our mask business is doing OK,” says Carter. Duke’s is preparing for an inevitable reopening, with a safety-first philosophy by installing plexiglass shields at the check-out counters as well as stations where people can wash their hands and use hand sanitizers, along with extra cleaning of the store in preparation for the next day. While high school spring sports in Kentucky were cancelled, he is hoping local recreation sports might be salvaged. “Our local youth baseball leagues are hoping to start playing in July, which will help us,” says Carter. When Duke’s Sporting Goods does reopen, Carter does not expect a rush of customers. “It’s going to be tough and business will probably be slow in the beginning,” says Carter. “Customers have to feel safe about going shopping.”

In the greater Washington, D.C. area, the day-to-day business of P.J. Sports is impacted by two governors since it has a presence in two communities in two states — Falls Church, VA, and Bethesda, MD. As a result, the business climate for selling soccer, field hockey and lacrosse is bleak, at best. “I have no positive news,” says owner Mike Galipoli. “Right now, things are out of my control. I am getting calls from vendors asking if it’s okay to ship orders for this fall. It’s not okay. Customers and vendors are asking me questions that I can’t answer.” While many businesses in his area began closing their store fronts in mid-March, P.J. Sports stopped selling sports gear on March 9, a week earlier than everyone else. “We could see the writing on the wall,” Galipoli says. “Before we closed, we were actually losing money on some days.” To his credit, Galipoli has continued to pay his four full-time employees since the business stopped selling to the general and sporting public, hopefully with some federal financial assistance. P.J. Sports is generating some revenue by selling gift certificates, which allows for easy electronic sales to take place.

Blow to the Bottom Line

In eastern Tennessee, COVID-19 dealt a financial body blow to the bottom line of Team Sports Outfitters, Bristol, TN, but owner Chris Horner and his staff are still standing. “When you take away 99 percent of your customer base in one week, it’s tough,” says Horner. “Now, we’re day-by-day and we’re going to wait it out.” Horner does not have a crystal ball, but he thinks that the likelihood of fall sports being played will depend on where the country is by early July. He remains optimistic that fall sports will be played, but with a limited number of fans. “I can see where stadiums and gyms are marked so that spectators must sit or stand at least six feet apart,” says Horner. At Zide’s Sporting Goods, Marietta, OH, owner Rod Zide is amazed at the state of the affairs in the U.S.

“This is certainly nothing you could have expected or prepared for,” says Zide, whose customer base is split evenly between Ohio and West Virginia. “It’s a different world now,” but he emphasizes the importance of a pragmatic return to life as we knew it. “Let’s start slow and start safe,” he says. “Let’s be safe and get this economy cranked up again. But, let’s not rush things.” In the deep south, sales for D&H Sports, Bastrop, LA, came to a grinding halt, due to COVID-19 and the instructions of Louisiana’s governor, John Bel Edwards. “I’m sitting here twiddling my thumbs, not making any money,” says Glen Hendrix, owner, D&H Sports. “All the schools are closed and all the rec departments are closed.” It’s been that way since March 20 in the Bayou State. Next door in Texas, a powerful community spirit in Port Neches is keeping attitudes strong and moods upbeat, according to Jessie Garcia, owner of The Complete Athlete.

“People know what to do in our community to help one another,” says Garcia. “Admittedly, it was a little rough in the beginning.” While 90 percent of the business for The Complete Athlete is from team sports, Garcia is currently focused expanding his retail presence so that his income source becomes more diversified. That strategy is already reaping dividends. “People in our community have purchased fundraising T-shirts from us, which helps,” he says. While the impact of the coronavirus has dealt a similar, sizeable and simultaneous financial blow to the entire team sports sector, the team dealers that survive, moving forward, will be on the ones that have the best response and can rebound with a refined and revised business strategy that works best in the days, weeks, months and years that lie ahead.  And, in many cases, that response can be impacted by attitude. Is the “new normal” a brick wall or is it an opportunity?

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