US running retailer The Finish Line Inc has confirmed that Gart Capital Partners (GCP) is making a US$10 million strategic investment in Finish Line’s Running Specialty Group, with the goal of creating the US nation’s single largest operator within the growing specialty running business, a market that has been estimated at up to US$1 billion. Under this latest deal, it is understood that Finish Line remains the majority owner of the Running Specialty Group.
The strategic investment pairs Finish Line, a US$1.4 billion national athletic footwear and apparel retailer, with GCP, an equity investment partnership that has a proven track record of successfully executing specialty retail rollups, including a 12-year joint venture with Vail Resorts Inc that involved more than 150 ski-related shops generating US$200 million in annual sales.
Headquartered in Indianapolis, The Finish Line Inc is a premium retailer of athletic shoes, apparel and accessories. The company has two retail divisions – Finish Line, which operates 635 Finish Line brand stores in malls across the US, and The Running Specialty Group, which operates 19 specialty running shops in seven states and the District of Columbia under The Running Company banner.
Finish Line stores employ more than 11,000 ‘sneakerologists’ who help customers every day ‘connect with their sport, their life and their style’. Online shopping is available at www.finishline.com and mobile shopping is available at m.finishline.com.
The Running Company stores carry ‘a deep assortment of performance running shoes, apparel and accessories.’ Their trained experts advise everyone from beginner to advanced runners and provide free gait analysis to ensure the proper fit for each customer. The Running Company is tightly connected to its communities, hosting regular neighborhood group runs and sponsoring local races.
The headquarters of the Running Specialty Group will be relocated to Denver, where GCP will manage all day-to-day operations as well as merchandising and the acquisition of additional running operators from its home base there. Finish Line will continue to leverage its strengths as a leading omni-channel retailer, providing direct logistics, marketing and IT support along with digital expertise.
In fact, this spring, the Running Specialty Group will launch Run.com, a digital experience for runners that will ‘marry content, community and commerce’.
For Finish Line, the venture builds upon the 2011 acquisition of an 18-store chain of specialty running shops operating under The Running Company banner. This acquisition represented a first step in pursuing the significant market opportunity within specialty running, which the company notes is currently a highly fragmented market with limited e-commerce penetration.
“We are excited to take our specialty running growth plans to the next level with GCP,” said Finish Line Chairman and Chief Executive Officer Glenn Lyon. “Like the ski retail business, customers within specialty running prize a shopping experience that is expert, highly localized and infused with the sport’s unique culture. Maintaining the individual personality of each running store concept, while providing the synergies of larger-operator systems and back office support, is critical for success.”
Lyon added, “GCP has a proven track record of demonstrating that these principles can be maintained while simultaneously executing a successful rollup strategy. We look forward to growing this business with GCP and are confident that our association will accelerate progress and perhaps serve as an incubator for expansion outside of specialty running down the road.”
“We are excited to partner with Finish Line to create this innovative approach toward growth in the running specialty channel,” added GCP Partner Ken Gart. “We bring the ability to celebrate the unique culture of independent running stores and maintain what makes them great in their local markets while Finish Line brings the efficiencies of a large scale and expertly run retail operation.
Gart continued, “We’ve achieved success using this type of model with Vail Resorts in the ski business and look forward to applying the same dynamics to the world of running as we seek out and acquire additional operators. This is a time of change within specialty running and we are out in front leading it.”
www.finishline.com
www.therunningcompany.net
www.gartcompanies.com
