Rapheal John-Lall
Published:
Thursday, November 5, 2015
Sports and Games Ltd., which was first opened at the end of World War II, has successfully made the transition from the brick and mortar era into the age of e-commerce and online shopping as the company celebrates its 70th anniversary.
Omar Hadeed, Director of Sports and Games Ltd, which sells sporting goods, said that the company has experienced a significant increase in sales since it launched its first website six years ago.
“We started to develop e-commerce. We launched our website in December 2009 and we have seen significant increase over that period. We have seen a 45 per cent increase in sales between 2009 and 2015. It has been so encouraging that we are now investing more into e-commerce and we are launching a new site for our 70th anniversary at the end of November,” he told the Guardian last Thursday.
He added: “Online sales have grown almost 45 per cent in just over four years and our wholesale department, which did not even exist two years ago, now contributes just over ten per cent of total revenue, both operating with minimal expense.”
They opened their first large concept store in 2001 but by 2006 this concept peaked and it started to become unprofitable, he said.
“By the end of the decade we started to realise a shift and the brick and mortar stores had become too expensive. The real estate was too expensive. The rent that we were paying was very high. We had opened up most of our concept stores between 2001 to 2006 and by the end of the decade the rent had almost doubled. There was such a growth in the economy that between 2005 and 2008 people spent like it was Christmas everyday. Everyone felt wealthy and the spending was uncontrollable, landlords felt that business was booming and they could raise rent,” he said.
Hadeed, who is 32-years old spoke to the Guardian last Thursday at his office, which is on the Trincity Industrial Estate.
He said there was “resistance” when they launched their first website in 2009.
“People were not yet accustomed to shopping online. I would say by 2012 locals started to shop online internationally because there were new freight companies that made it feasible. We also try to have our prices comparable to the United States, where our prices are not the same but better. We give better service and guarantee delivery within 48 hours. Customers have now become accustomed to us. Right now we take the payment offline because it is safer for us. None of the banks in T&T give us secure service and we did try Paypal but the percentages were too high. With Paypal there was a lot of fraud as we used to deliver items to customers that did not exist,” he said.
He said the system they use now is much safer.
“Right now you provide your information as you would on any other website and we have a designated person in office that pursues that information in the same way that you would go to a store and you give us your credit card information. We plug in the numbers and when we deliver the item, then the customer signs. We have been around for 70 years and people trust us,” he said.
He advises others in the local business community not to fight the growing trend of online shopping but to embrace it as the shift is inevitable .
“E-commerce is the future but at present it only represents six per cent of total retail sales in the United States. Yes, it is growing very quickly but it is still a small portion. People still like to touch, still like to taste, they still like to feel. I have to shop for my stores and I go to China, Panama, Europe. I can buy everything from my desktop computer for my stores but I choose not to. I still want to feel and touch and see. My customer is the same way,” he said.
Early Days
Sports and Games was founded in 1945 by Horace E. Ames and Gerry Gomez.
Hadeed referred to Gomez as a “sporting icon” as he played for the West Indies cricket team while Ames was a businessman.
He said on a trip to the United Kingdom, the two sportsmen saw sports supply stores there and decided that Trinidad needed a similar store and they opened the first store on Henry Street in Port-of-Spain.
“In 1961, disaster struck and there was a huge fire at that location and then they relocated to Chacon Street which is still there today.”
He said they continued to expand the brand locally by expanding to Tobago as well as regionally in Barbados and Jamaica.
By 1993, there was a lack of succession and Gomez decided to sell Sports and Games Ltd to Emperor Footwear, which was a supplier of branded foot wear in those days. Emperor Footwear was founded by Omar Hadeed's father, Charles Hadeed.
“Emperor Footwear was a manufacturer and he supplied to Sports and Games. In those days we had the license for Puma and produced their products in T&T. In those days there were import restrictions so all the components had to be shipped here and put together. We had a factory right here on this compound. There was the relationship between my father and Gerry Gomez. The market had just started to open up and there was no need for manufacturing here and it was cheaper simply to import. My father thought it time to diversify,” he said.
After buying over Sports and Games Ltd, his father sold the stores in Barbados and Jamaica.
“Those days there were three stores in Trinidad and we grew it to 15 locations. Now we have 12,” he said.
He said a lot has changed since his father bought the brand almost 25 years ago.
“Things have evolved greatly. In those days Sports and Games was very sport oriented which it still is. The core business was sporting goods and electronics. Sports and Games was always affiliated with some of the biggest names in sports. We diversified the company to more mainstream so we started to introduce brand-wear footwear and clothing. There was an element of fashion and we eliminated the electronics,” he said.
By the early 2000s the new owners started to redefine the brand.
“We started to open large outlets. We went from four stores in the late 1990s to 15 stores within ten years and these stores were at an average of 10,000 sq ft. They were designed by a European company called Umdach, a world-renowned company. They have designed a lot of the Nike concept stores. We started our first concept store at Trincity Mall, which we opened in 2001. The reception was great. It was a new way of selling and at that time it was one of the largest retail outlets in the country. It had a clean look and was well lit. We brought in international companies to train our staff,” he said.
Expansion and challenges
At the moment Sports and Games has 12 stores inclusive of Tobago and they have recently opened a new store in Barbados.
“It was opened in March 2014. It has been challenging as the economy in Barbados has been stagnant but we have committed to our expansion regionally. However, the response has been fantastic in Barbados. Surprisingly the culture in Barbados is different. They benefit from the influx of tourism and they have duty free prices. Most of our customers in Barbados commend us on our product range and prices compared to what they are accustomed to in England or the United States,” he said.
He said they hope to expand to St Lucia and to Jamaica.
“We are looking at this expansion within the next five years,” he said.
In T&T, he said over the years they have bought out most of the other competitors starting with Super Star and the Sports Master.
“On the last market research that was done in 2014, we occupied 72 per cent market share within our category which is sporting goods,” he said.
Despite their dominant market position, he said in this era everyone wants to be an entrepreneur and there are a lot of people selling out of their homes and this is cutting into market share.
“A lot of athletes and persons involved in sport actually buy and bring their own products. So you have tennis coaches bringing in their own tennis rackets. There are gym instructors that bring in their own fitness accessories for their customers. So everyone wants to do business and be an entrepreneur without having a brick and mortar store. Of course it has affected us as that is our customer base and with that direct relationship with the supplier it is difficult to compete as at the end of the day we are a massive chain of stores and we are unable to give that same expertise as would the coaches who specialise in their areas,” he said.
He also spoke about the problems of accessing foreign exchange to do business.
“It has been an issue for us over the last three years, but it has been worsening for the last year. I think the Central Bank needs to review the structure that they have. We are a seasonal company and supply products for certain times of the year like for the football season we must have football accessories, and the same goes for cricket, tennis and all other sports. We have struggled to supply the product for the time in which it is is necessary. As a result we have been bringing in goods later than the season and we have been losing sales,” he said.
Sports and Goods distributes international brands like Wilson in tennis, Spalding in basketball, Speedo in swimming among other brands. He said those suppliers have been “frustrated” by late payments from Sports and Games.
“They have worked with us but there is a limit,” he said.
New Age of retail stores
Hadeed said in the 2000s they concentrated on super stores and now they have consolidated those stores but they can no longer fit all their items into the physical store space.
“We cannot stock all the items such as punching bags or tennis tables. So we have to use the integration of e-commerce into the stores. By the time we celebrate our 75th anniversary we would have remodeled all of our stores. We have completed the design phase and now it is to implement and we are going into a new age of retail stores,” he said.
He said in the same way they redefined themselves in the early 2000s they are going to redefine themselves within next five years.
“These stores would be geared to the new customer. The new customer demands service, the new customer is more connected, more intelligent. When the customer comes in to the new look store, they will find portals where they can shop online. So the customer comes in the store with the brand new website and they order what they want, with the advantages of touching and feeling. So you want a treadmill and we do not have the color you want, you can go and order it online at our in-house portal. It would be delivered to you in 24 hours and if you do not like it, it will be refunded in another 24 hours,” he said.
They will have this first concept store opened in nine months time.
“The first store is expected to be opened at the Price Plaza branch. We are also at Gulf City for the second concept store. There will be the remodeling of existing stores.”
He said the landscape of retail worldwide is changing.
“These changes must be embraced. Those who are innovative will survive and those who refuse to change will become extinct. We are doing our best to be innovative,” he said.
Business Guardian
Omar Hadeed, Director of Sports and Games Ltd, Photo: Abraham Diaz.