Strategic initiatives yield record Forzani Q3 results

13 Dec '10

3 min read

The Forzani Group Ltd, Canada's largest retailer of sporting goods, reported fiscal 2011 results for the 13-week third quarter and 39-week period ended October 31, 2010.

"The continued execution of our strategic initiatives contributed significantly to our improved same-store sales, margin and operating costs in the third quarter of fiscal 2011," said Bob Sartor, FGL's Chief Executive Officer. "Our strong market presence and favourable weather in Eastern Canada also played a role in the gains."

"We accomplished these results despite lower year-over-year marketing spending in the quarter. This planned reduction resulted from the shift of spending to Q1 and Q2 in support of the Winter Olympics, FIFA World Cup, the re-branding efforts of our Atmosphere stores and the launch of the Livestrong footwear, apparel and accessories program. At the same time, we maintained disciplined expense control at the store level, which contributed to a 21% improvement in EBIT over the strong results achieved a year earlier."

"As we enter the all-important Christmas season, we believe there still seems to be some uncertainty around the economic recovery. However, our confidence is bolstered by the gains we have made so far, by our achievements against our strategic plan and by the promising start to our fourth fiscal quarter."

Progress against Strategic Plan

As previously disclosed, FGL established a strategic plan designed to unify and simplify our business, expand our reach and improve productivity. FGL's progress during the third quarter against this strategic plan included, but was not limited to, the following:

• Continuing to rebrand our former Coast Mountain Sports stores under the Atmosphere banner, allowing us to gain economies of scale from having one outdoor and lifestyle chain instead of two.
• Adding three Nevada Bob's Golf concept shops to Sport Chek stores, which extended the planned fiscal 2011 roll-out to 41 concept shops in Sport Chek locations. There are now 73 concept shops.
• Opening 8 Hockey Experts elite hockey concept shops in key Sport Chek locations as a further test of the "shop within a shop" component of our strategic plan. There are now 27 concept shops.
• Continuing work on the next generation of the purchasing, allocation and distribution information systems enhancement project.
• During the quarter, FGL completed the first full year of its e-commerce initiative, Sportchek.ca. Since the launch in October 2009, FGL has extended its retail reach to customers outside its normal trading area and provided support to the estimated 70% of Canadian consumers that research their purchases online. The state of the art site now offers more than 10,000 unique product styles and colours, up from approximately 5,000 at launch. The site is supported by world class e-commerce provider GSI Commerce Solutions Inc. In its first year of operations, the site hosted nearly 10 million unique visitors.

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