Fifty-seven years ago, German immigrant Norbert Olberz spent $10,000 — his life savings — to open a small ski shop in La Cañada Flintridge. He and his wife, Irene, spent the first year sleeping in the back of the shop, showering with a garden hose. But their sacrifices paid off: The business expanded to sell scuba gear and baseball mitts and all types of sports gear, and blossomed into a 55-store sporting goods chain with locations in Arizona, California, Nevada and Utah.
Late last week, news broke that the retailer is going out of business.
According to a statement posted on its website, Sport Chalet — which was sold two years ago to the Connecticut-based Vestis Retail Group — will remain open for “several weeks” as it conducts the process of closing its remaining 47 stores, including its 45,000-square-foot flagship facility in LCF’s Town Center.
Vestis filed for Chapter 11 bankruptcy protection Monday, issuing a statement indicating it intends to transfer its other retailers, Eastern Mountain Sports and Bob’s Stores, to its parent company, private-equity backer Versa Capital Management.
“EMS and Bob’s are now delivering solid performance but have been burdened by limited financial flexibility due, in part, to the unique competitive pressures facing Sport Chalet,” Vestis Chief Executive Mark Walsh said in the statement. “We determined that the best path forward is to separate the businesses and confront the challenges that have been hindering our overall progress.”
The decision to shutter Sport Chalet marks the end of an establishment that changed both the physical complexion and regional perception of LCF.
“It’s sort of like losing part of your family, you know? Like your grandparents passing away,” said City Councilman Dave Spence, who originally ran for a council seat in 1992 because he wanted to support the Olberz family in its desire to see the Town Center built, with the homegrown Sport Chalet as its anchor.
“Our council really was looking to try to improve the center of town,” Spence said. “His dream was to have a beautiful Sport Chalet store, a new facility where everything was all in one location … [and] we were really hoping that we could improve the quality of the Downtown Village area by getting investors to come in.”
THE NEW SPACE
It took the Olberz family more than two decades of wrangling with detractors, many of whom, Spence said, were wary of a potential “sea of parking” that they believed would plague any major shopping center.
But in 2001, the Olberzes got city approval to break ground on a new corporate headquarters, and five years later work began on the new multi-million-dollar shopping center, to be anchored by Sport Chalet. Finally, in 2008, the 7.6-acre Town Center opened for business.
The largest commercial development in the history of LCF was sold for about $40 million to Los Angeles-based IDS Real Estate Group in 2011, the same year Norbert Olberz died, at 86, of natural causes. La Cañada Properties Inc. retained ownerships of Sport Chalet’s corporate headquarters.
But what happens to the shopping center without its largest retailer — and one of the city’s top 25 revenue-producers, according to Chamber of Commerce President and CEO Pat Anderson — is anyone’s guess.
“I don’t know what it’s going to mean for our community long-term,” Anderson said. “Short-term, I think the chamber and the city need to communicate with the owners of the Town Center and to figure out what the game plan is, what is their strategy, and certainly to impart what our hopes and desires are in terms of any future tenants.”
“We are very disappointed with the news; Sport Chalet has been an important part of the community for nearly 60 years,” said Rob Fuelling, senior vice president at IDS, who said he’s confident that the center’s other tenants will withstand the loss of the sporting goods giant without trouble.
“It’s too early to comment on anything else as far as it relates to Sport Chalet and the details of their announcement,” Fuelling added, saying IDS was proactively working through the process despite not having been contacted, as of Tuesday, by Sport Chalet.
IDS has spent more than $1 million in the past few years on upgrades to the center, including introducing new monument signage and, as of this month, a new courtyard with additional seating.
“They’ve been working hard to make everything better in that downtown development and to fill up all the stores along Foothill,” Spence said. “It looks like they just about got everything else going and then this thing comes hitting them in the stomach.”
From the city’s perspective, City Manager Mark Alexander indicated that he didn’t foresee the retailer’s demise substantially hurting the bottom line.
“I can say that the city is in a sufficiently secure financial position that the store’s closure will not have a significant negative impact on the city’s budget,” Alexander wrote in an email. “As one of the city’s largest sales tax generators, Sport Chalet’s closure will, obviously, be noticeable, but our city’s revenues are sufficiently diverse and revenue growth in other areas following the recession have been comfortably rebounding.”
Still, Alexander wrote, the city will feel the loss in other ways: “To hear of the store’s and headquarters actual closing is heartbreaking, given the company’s origins and long history in La Cañada Flintridge. Over the years, I have heard many tales from local residents reminiscing about their first jobs at Sport Chalet, or others who would drive long distances across Southern California just to shop at the ‘La Cañada’ Sport Chalet store.”
Over the weekend, news of the pending closure drew large crowds to the LCF store, where merchandise was initially marked down 10%. Customers also sought to redeem gift cards, rewards certificates and store credits, which they may do until April 29.
As merchandise vanished from the shelves, business remained brisk early in the week, when a sales representative dutifully helped a young ballplayer shopping for an aluminum baseball bat with his mom determine the differences between a “minus-11” aluminum bat and a “drop-12” version.
John Manning purchased a pair of shoes. He said he’s been coming to LCF to shop at Sport Chalet since the 1970s, attracted in part by the insight offered by salespeople whom he said lived up to the store’s slogan, “The Experts.”
“I knew a guy who used to work here and he was a professional fly fisherman,” Manning said. “The fisherman you spoke with, they knew what bugs were out at that time, so they knew what flies to take so you could go out and catch fish. I’d never gone fly fishing before and I went out and just caught fish after fish. So, yes, they had experts there.”
But in today’s Internet age, companies such as Sport Chalet and Sports Authority — which announced plans to close 143 of its 450 stores — don’t do a good enough job focusing on providing added value, or on marketing it, said Ira Kalb, an assistant professor at USC’s Marshall School of Business, who specializes in branding, image creation, marketing and corporate communications.
“Most markets have been disrupted by the Internet, and so a lot of people are buying the kind of products they would at a Sport Chalet online,” Kalb said. “If you go to a store, the traffic in Southern California is getting worse and worse. You have to park and drive and all that other stuff, and what they’re doing is they tend to go to the big, big mega stores like Target because they go there to shop for everything at one time.
“But it’s not like Sport Chalet didn’t have a chance — they did. You just have to understand your added value and … you have to show to the marketplace that you’re adding value.”
Anderson said she worried when Vestis took over in 2014, paying about $17 million in cash and assuming more than $50 million in debt in the purchase.
“One, the owners were on the East Coast, and, No. 2, they did not have a presence in Southern California,” she said. “Those two elements were worrisome. With any major retail business, you have to have someone on your staff who is very savvy in following the trends and issues and being able to add those things through use of technology. If you don’t have a very active person or persons doing that, it’s going to be pretty hard to survive, because the retail world is so competitive and the world is changing as to how people shop.”
The company didn’t indicate how many people will lose their jobs, but as of March 30, 2014, Sport Chalet reportedly had 1,200 full-time employees and 1,600 part-timers.
In addition to jobs and tax revenue, LCF will lose a local institution.
“Like everybody, I’m very sad. I’m just bummed,” Manning said. “I didn’t know what happened but I felt extremely disappointed because Sport Chalet has been here for so long and has taken care of this community for so long.”
“Fifty-seven years is a long run,” Anderson said. “And not only is it a long run, but it was such a personal part of our community. Having the founder live here and develop the store from nothing into this mega-chain, I guess one could say it’s a good thing Mr. Olberz is not here to see the demise of his dream. It was a perfect American story.”