Hibbett Sports 2010 Annual Report Download - page 10

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6
Additionally, we also use sophisticated information systems to maintain tight controls over inventory and operating
costs and continually search for ways to improve efficiencies through information system upgrades.
We strive to hire enthusiastic sales people with an interest in sports. Our extensive training program focuses
on product knowledge and selling skills and is conducted through the use of in-store clinics, videos, self-study courses,
interactive group discussions and “Hibbett University” designed specifically for store management.
Our Store Concepts
Hibbett Sports
Our primary retail format is Hibbett Sports, a 5,000 square foot store located primarily in strip centers which
are usually influenced by a Wal-Mart store. In considering locations for our Hibbett Sports stores, we take into account
the size, demographics, quality of real estate and competitive conditions of each market. Of these stores, 556 Hibbett
Sports stores are located in strip centers with the remaining 191 stores located in enclosed malls, the majority of which
are the only enclosed malls in the county.
Hibbett Sports stores offer a core selection of quality, brand name merchandise with an emphasis on team
sports. This merchandise mix is complemented by a selection of localized apparel and accessories designed to appeal
to a wide range of customers within each market. We strive to respond quickly to major sporting events of local
interest. Such events in Fiscal 2010 included the Alabama Crimson Tide’s historic season and ultimate victory in the
Bowl Championship Series (BCS) National Championship game as well as the successful seasons of the New Orleans
Saints professional football team and the University of Kentucky basketball program.
Sports Additions
Our 16 Sports Additions stores are small, mall-based stores, averaging 2,500 square feet with approximately
90% of merchandise consisting of athletic footwear and the remainder consisting of caps and a limited assortment of
apparel. Sports Additions stores offer a broader assortment of athletic footwear, with a greater emphasis on fashion
than the athletic footwear assortment offered by our Hibbett Sports stores. All but two Sports Additions stores are
currently located in malls in which Hibbett Sports stores are also present.
Sports & Co.
We opened four Sports & Co. superstores between March 1995 and September 1996. Sports & Co.
superstores average 25,000 square feet and offer a broader assortment of athletic footwear, apparel and equipment than
our Hibbett Sports stores. Athletic equipment and apparel represent a higher percentage of the overall merchandise mix
at Sports & Co. superstores than they do at Hibbett Sports stores. Sports & Co. superstores are designed to project the
same in-store atmosphere as our Hibbett Sports stores but on a larger scale. We have no plans to open any superstores
in the future.
Team Sales
Hibbett Team Sales, Inc. (Team Sales), a wholly-owned subsidiary of the Company, is a leading supplier of
customized athletic apparel, equipment and footwear to school, athletic and youth programs primarily in Alabama and
North Georgia. Team Sales sells its merchandise directly to educational institutions and youth associations. The
operations of Team Sales are independent of the operations of our retail stores. Team Sales does not meet the
quantitative or qualitative reporting requirements of the Accounting Standards Codification (ASC) Topic 280, Segment
Reporting.
Our Expansion Strategy
In Fiscal 1994, we began to accelerate our rate of new store openings to take advantage of the growth
opportunities in our target markets. We have currently identified 350 to 375 potential markets for future Hibbett Sports
stores within the states in which we operate. Our clustered expansion program, which calls for opening new stores
within a two-hour driving distance of an existing Hibbett location, allows us to take advantage of efficiencies in
distribution, marketing and regional management. It also allows us to build on our understanding of merchandise
selection for that area. We believe our current distribution center can support over 1,200 stores.
In Fiscal 2011, we expect our net store openings will be similar to Fiscal 2010. We have identified potential
markets but have experienced increasing difficulty in securing suitable real estate or leases within the targeted market.
While we expect overall new store growth, we anticipate that the current economic environment, particularly in the
commercial real estate market, will continue to make it harder to open our stores at our historical rate of growth.
Because of the new store opening slowdown, we have turned our focus somewhat on expanding high performing stores
and have seen successful results from this strategy.