Hanaka Says Turnaround For The Sports Authority Halfway Home

Marty Hanaka, since his tenure as Chair & CEO of The Sports Authority (TSA) began three years ago, has "cut costs, halted the building binge, invested in updated operating systems and changed merchandise strategy," according to Barbara Powell of the Ft. Lauderdale SUN-SENTINEL. Hanaka has also "assembled his turnaround team, replacing 12 of 17 top executives with new hires from the ranks of some of the country's top retailers." Hanaka, on the state of TSA when he took over: "The problems were deeper than I had anticipated. There were people who wondered if we could even make payroll." But while the company lost money in 1Q '01, it "can boast improved profit margins." The company also ended FY '00 with a "modest increase in comparable store sales, its first since" '96, and earned net profit of $25.4M on sales of $420M. TSA's stock, while trading at one-tenth of its '96 high, has risen 200% this year. Buckman, Buckman & Reid retail analyst Ulysses Yannas, on TSA: "The way the stock is acting suggests that the market likes what they are doing." Hanaka said that the company is "halfway toward a complete turnaround, and must continue showing progress even in the current softened economy." But Hanaka "only wishes he had made deeper cuts more swiftly," saying, "I should have closed more stores sooner and made management changes sooner." Hanaka and his turnaround team have "focused on finding ways to cut costs and free up money for capital improvements and on revamping store formats and merchandise." Powell added a "new-store expansion will begin next year with five stores, and 10 to 12 slated for 2003." This year, TSA is remodeling eight of its 198 stores, and the company said it will "eventually ... remodel 120 of its 198 existing stores" (SUN-SENTINEL, 7/22).