Case Study: The Sports Guy
THE SPORTS GUY
The Sports Guy is an independent sporting goods store located in a small town outside the Greater Toronto Area. About half the town's population lives in the older section of town; the other half consists mostly of younger families living in recently built subdivisions to the south of town. Nearly all of the residents of these subdivisions commute daily to their work in the Greater Toronto Area. The housing developer has placed before the Ontario Municipal Board proposals for considerably more housing development over the next ten years.
The Sports Guy is owned by Bob ("Rocky") Rhodes, age 32, who has for many years been a high-profile personality in the local sports community. Following in his father's footsteps, …show more content…
Its main retail competitor in town is the Canadian Tire store. This is an older store that is relatively small by modern Canadian Tire standards. It offers low prices, but stresses high-turnover items and lacks higher-quality and specialty items. People have commented to Rocky that Canadian Tire's prices are good, but that it is lacking in customer service.
As noted earlier, most of The Sports Guy's selling has been through Rocky's personal contacts with teams. In addition, the store regularly runs a small ad (1/16 page) in the local newspaper, which is printed twice weekly and distributed free to each household in town. The paper stresses local news, and Rocky has heard that a survey conducted by a group of retailers indicated that its readership consists mostly of longer-term residents. In addition, The Sports Guy advertises on the sports show on the local cable TV channel that covers community events, and in the local …show more content…
THE SPORTS GUY
Income Statements
2006 2007 2008 ($ 000) % ($ 000) % ($ 000) %
Sales Revenue $570.0 100.0 $583.0 100.0 $600.0 100.0 Cost of Goods Sold 404.7 71.0 415.0 71.2 427.0 71.1 Gross Profit 165.3 29.0 168.0 28.8 173.0 28.9
Operating Expenses: Wages1 80.5 14.1 83.8 14.4 90.0 15.0 Advertising 6.3 1.1 6.3 1.1 6.0 1.0 Utilities 4.8 0.8 4.9 0.8 5.0 0.8 Property taxes 10.0 1.8 11.5 2.0 12.0 2.0 Interest 28.0 4.9 30.0 5.1 32.0 5.3 Depreciation 6.3 1.1 6.2 1.1 6.0 1.0 Other 10.6 1.9 7.2 1.2 4.0 0.7 Total Expenses 146.5 25.7 149.9 25.7 155.0 25.8
Net Profit before tax 18.8 3.3 18.1 3.1 18.0
The Sports Guy is an independent sporting goods store located in a small town outside the Greater Toronto Area. About half the town's population lives in the older section of town; the other half consists mostly of younger families living in recently built subdivisions to the south of town. Nearly all of the residents of these subdivisions commute daily to their work in the Greater Toronto Area. The housing developer has placed before the Ontario Municipal Board proposals for considerably more housing development over the next ten years.
The Sports Guy is owned by Bob ("Rocky") Rhodes, age 32, who has for many years been a high-profile personality in the local sports community. Following in his father's footsteps, …show more content…
Its main retail competitor in town is the Canadian Tire store. This is an older store that is relatively small by modern Canadian Tire standards. It offers low prices, but stresses high-turnover items and lacks higher-quality and specialty items. People have commented to Rocky that Canadian Tire's prices are good, but that it is lacking in customer service.
As noted earlier, most of The Sports Guy's selling has been through Rocky's personal contacts with teams. In addition, the store regularly runs a small ad (1/16 page) in the local newspaper, which is printed twice weekly and distributed free to each household in town. The paper stresses local news, and Rocky has heard that a survey conducted by a group of retailers indicated that its readership consists mostly of longer-term residents. In addition, The Sports Guy advertises on the sports show on the local cable TV channel that covers community events, and in the local …show more content…
THE SPORTS GUY
Income Statements
2006 2007 2008 ($ 000) % ($ 000) % ($ 000) %
Sales Revenue $570.0 100.0 $583.0 100.0 $600.0 100.0 Cost of Goods Sold 404.7 71.0 415.0 71.2 427.0 71.1 Gross Profit 165.3 29.0 168.0 28.8 173.0 28.9
Operating Expenses: Wages1 80.5 14.1 83.8 14.4 90.0 15.0 Advertising 6.3 1.1 6.3 1.1 6.0 1.0 Utilities 4.8 0.8 4.9 0.8 5.0 0.8 Property taxes 10.0 1.8 11.5 2.0 12.0 2.0 Interest 28.0 4.9 30.0 5.1 32.0 5.3 Depreciation 6.3 1.1 6.2 1.1 6.0 1.0 Other 10.6 1.9 7.2 1.2 4.0 0.7 Total Expenses 146.5 25.7 149.9 25.7 155.0 25.8
Net Profit before tax 18.8 3.3 18.1 3.1 18.0