Sporting goods retail chain Sports Authority’s arrival to Puerto Rico coincides with a time of economic challenges for the island that also represent opportunities for a company that has been considering coming here for more than a decade.
In an interview with News is my Business, Sports Authority CEO Michael Foss said despite the current volatility, Puerto Rico is “a phenomenal market because the culture here is so intertwined with sports that we know this will be a real successful partnership with the island.”
It was back in early to mid 2000s when the retailer first looked at the market, but opted out of investing. Foss, who joined the company’s Board in 2009, said it was sometime after that when Sports Authority relooked at Puerto Rico and made the decision to come here in some scale.
“Our company was made up of several companies that merged together. In the early to mid 2000s we were still trying to digest several mergers over the years, and we didn’t have management bandwidth to get this done,” said Foss, who was promoted to CEO in June 2013.
“We decided to do this when I was on the board, we decided it was going to be a great opportunity,” Foss said. “We knew there were some economic challenges and I said there’s not any economy in the world that doesn’t have periodic economic challenges, so it may be volatile for a little while, but ultimately, what we do is so aligned with the importance of sports in the culture that we knew it would be successful.
“I don’t know if it’ll take a year or two and not only do I think we’ll be successful, but we see expansion,” Foss said.
And so, in October of last year, Sports Authority opened its first Puerto Rico store, a 45,000 square-foot outfit in Ponce, which has served as a barometer of sorts to evaluate what works best for local consumers, including tweaking assortments.
“People are passionate about sports and they know exactly what they want,” company District Manager Armando Pérez said. “We have seen some differences in terms of what we need to have available. For example, we sell Puma [branded] merchandise here, and we don’t carry Puma in the States.”
Mountain biking, skating and long board equipment — in demand by extreme sporting buffs — have also been moving briskly in Ponce.
“We opened in Ponce in October and we made a few mistakes, but that’s normal. We’ll get it more aligned with what people want as we go along,” Foss said.Puerto Rico’s three stores will be fine-tuning assortments to meet local consumer needs, company officials said.
To continue with the fine-tuning process, Sports Authority has been quietly operating its two newest stores in Puerto Rico, in Plaza Carolina and Plaza Las Américas for several weeks, leading up to formal grand openings this past weekend.
Sports Authority has hired more than 175 employees for both stores, for a total of more than 315 jobs in Puerto Rico, including its Ponce outlet. Each store is about 45,000 square feet, on par with the average Sports Authority stateside.
“We’re excited to celebrate the grand openings of our two newest Puerto Rico locations in San Juan and Carolina,” said Foss. “Sports Authority admires Puerto Rico’s sporting legacy and we are dedicated to providing great value and outstanding service to all the families, athletes and fans in the San Juan and Carolina communities. We believe in bringing together communities through the power of play, and we encourage everyone to discover the good of sport.”
But the retailer’s presence will not be limited to those three stores. Plans are already underway for a fourth store in Bayamón next year, while the retailer continues to scout the market for future locations, the executive said.
“We’ve opened three stores and are looking at our assortment and that will determine whether we’ll go for six, eight or 10 stores. Given the importance of sports here, we think it’s a perfect fit for us,” Foss said.
While the retailer does not reveal investments associated with new store openings, Foss acknowledged Sports Authority has received incentives from the local government for job creation. The central and municipal governments also pitched in to help the retailer move the permits process along so that it could open its stores according to schedule, Foss said.