Seven months after a management-led buyout in conjunction with Raleigh, N.C.-based Investors Management Corp., the chain of franchised specialty running shops based in Carrboro, N.C., is growing its store count, moving into underserved areas and targeting runners and walkers of all fitness levels.
After the planned departure in April of longtime CEO Tom Raynor, the management team led by president Jeff Phillips has remained entirely intact, as has the game plan, according to Phillips.
“Our core strategy isn’t going to change,” he said. “And we have an absolute commitment to local-owner operators.”
But the partnership with IMC, which also owns the Golden Corral franchise, has been beneficial, Phillips said. “We have been in complete philosophical alignment in terms of how we think about franchising and the business,” he said. “And that’s huge — dealing with a financial partner who understands franchising.”
Working with the new investors also has helped Fleet Feet to accelerate some ambitious growth plans. “We have cash on the balance sheet and a strong cash position to invest, make acquisitions and grow. Certainly, we wouldn’t have been in that position without a financial partner,” Phillips said.
Part of that expansion will come from new locations. Fleet Feet has opened six new stores this year, in Rancho Cucamonga and Burbank, Calif.; Spokane, Wash.; West Lafayette, Ind.; Tacoma, Wash. (its second store there with an existing franchisee); and Houston (its fourth store there with an existing partner).
Vendors applauded the company’s efforts to become a bigger running player. “Ever since the purchase, you see more focus than ever before,” said Rick Wilhelm, VP of specialty retail accounts at Bothell, Wash.-based Brooks Sports. “They’re back on what they’re really good at: creating community.”
Kevin Adams, sales manager for running specialty at Boston-based New Balance, said, “Fleet Feet stores are key partners in our goal to become No. 1 in running.”
Going forward, growing and making acquisitions will be a major part of the strategy. “The time is now, the opportunity is great and we will be aggressive. We truly want to have a national brand presence, and there are numerous markets, including areas such as the upper Midwest, that are underserved with what we do,” Phillips said.
The buyout folded in the company’s independently operated Specialty Retail Development Co., which buys out running shop owners and works with top employees to help them become franchisees. And Phillips said Fleet Feet may even open stores “from scratch” with some of those transitioning employees — something it has never done before.
Overall, the retailer has continued to perform strongly this year, with 13.5 percent comp-store increases in August, and 14 percent in September.
Phillips said revenues have more than quadrupled in the last 10 years. And, he added, the company is confident that business will “continue to produce double-digit growth going into spring.”