Staples Founder Acquires 80% Of City Sports, Plans To Expand

Staples Founder Tom Stemberg and his venture capital firm, Highland Capital Partners, have “acquired an 80[%] stake” in Boston-based City Sports, an urban specialty sports retailer, according to Jenn Abelson of the BOSTON GLOBE. Highland Capital and City Sports declined to release financial details of the deal. City Sports has 14 stores across the East Coast and had about $75M in sales last year. Highland Capital has plans to “nearly triple the number of shops to 50 shops in the next five years.” Stemberg said that City Sports “has the potential for up to 300 stores in urban markets” across the U.S. Stemberg: “We would like to grow this as fast as we possibly can. These stores average $700 in sales per square foot. The numbers are mind boggling.” In conjunction with the deal, Highland Consumer Fund’s John Burns and Ted Philip and former Sports Authority CEO and former Staples COO Marty Hanaka will join City Sports’ BOD. Burns said of City Sports, “The market they play in -- sporting goods -- is a large and growing $106[B] market. And we know City Sports works. It works in Boston, in Philadelphia, in D.C. As we look across the national landscape, we feel there is a strong niche to focus on the metropolitan urban athlete” (BOSTON GLOBE, 3/11).