Hibbett Sports 2007 Annual Report Download - page 20

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28, 2006, Nike, our largest vendor, represented approximately 43.9% of our total purchases while our next largest
vendor represented approximately 7.6% of our total purchases.
The loss of key vendor support could be detrimental to our business, financial condition and results of
operations. We believe that we have long-standing and strong relationships with our vendors and that we have
adequate sources of brand name merchandise on competitive terms; however, we cannot guarantee that we will be
able to acquire such merchandise at competitive prices or on competitive terms in the future. In this regard, certain
merchandise that is high profile and in high demand may be allocated by vendors based upon the vendors’ internal
criterion, which is beyond our control. See “Risk Factors.”
Our Advertising and Promotion
We target special advertising opportunities in our markets to increase the effectiveness of our advertising
budget. In particular, we prefer advertising in local media as a way to further differentiate Hibbett from national chain
competitors. Substantially all of our advertising and promotional spending is centrally directed. Print advertising,
including direct mail catalogs and postcards to customers, serves as the foundation of our promotional program and
accounted for the majority of our total advertising costs in fiscal 2007. Other advertising means, such as television
commercials, outdoor billboards, Hibbett trucks, our MVP loyalty program and the Hibbett website, are used to reinforce
Hibbett’s name recognition and brand awareness in the community.
Our Competition
The business in which we are engaged is highly competitive. Many of the items we offer in our stores are also
sold by local sporting goods stores, athletic footwear and other specialty athletic stores, traditional shoe stores and
national and regional sporting goods stores. The marketplace for sporting goods remains highly fragmented as many
different retailers compete for market share by utilizing a variety of store formats and merchandising strategies. In recent
years, there has been significant consolidation of large format retailers in large metropolitan markets. However, we
believe the competitive environment for sporting goods remains different in small to mid-sized markets where retail
demand may not support larger format stores. In smaller markets, such as those targeted by Hibbett, national chains
compete by focusing on a specialty category like athletic footwear.
Our stores compete with national chains that focus on athletic footwear, local sporting goods stores,
department and discount stores, traditional shoe stores and mass merchandisers. Although we face competition from a
variety of competitors, including on-line competitors, we believe that our stores are able to compete effectively by being
distinguished as sporting goods stores emphasizing team sports and fitness merchandise complemented by a selection
of localized apparel and accessories. Our competitors may carry similar product lines and national brands and a broader
assortment, but we believe the principal competitive factors for all of our stores, including our four superstores, are
service, breadth of merchandise offered, availability of brand names and availability of local merchandise. We believe
we compete favorably with respect to these factors in the small to mid-sized markets predominantly in the Sunbelt, Mid-
Atlantic and Midwest. However, we cannot guarantee that we will continue to be able to compete successfully against
existing or future competitors. Expansion into markets served by our competitors, entry of new competitors or expansion
of existing competitors into our markets, could be detrimental to our business, financial condition and results of
operations. See “Risk Factors.”
Our Trademarks
Our Company, by and through subsidiaries, is the owner or licensee of trademarks that are very important to
our business. For the most part, trademarks are valid as long as they are in use and/or their registrations are properly
maintained. Registrations of trademarks can generally be renewed indefinitely as long as the trademarks are in use.
Following is a list of active trademarks registered and owned by the Company:
• Hibbett Sports, Registration No. 2717584
• Sports Additions, Registration No. 1767761
We also have pending registration on the trademark logo “Hibbett.”
Our Employees
As of February 3, 2007, we employed approximately 1,700 full-time and approximately 3,500 part-time
employees, none of whom are represented by a labor union. The number of part-time employees fluctuates
depending on seasonal needs. We cannot guarantee that our employees will not, in the future, elect to be
represented by a union. We consider our relationship with our employees to be good and have not experienced
significant interruptions of operations due to labor disagreements.