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As Michael Medline enters the Sport Chek store in Toronto’s east end, there are no corporate rock-star welcomes or employees scattering to look busy. Instead, they greet him with a familiar, “Hi, Mike,” and go about their business serving customers. Medline makes strategic observations and suggestions on store displays to the manager, but carefully avoids sounding dictatorial. He prefers a more collaborative approach to perfecting the customer experience in his stores. “I’m like an honorary team member here,” Medline says.
Perhaps play-making franchise quarterback would be a better comparison. Medline is the president of FGL Sports Ltd., the parent company of leading Canadian sports retailers such as Sport Chek, Atmosphere, National Sports and, in Quebec, Sports Experts. He oversaw Canadian Tire Corporation’s $770-million acquisition of Forzani Group Ltd. in 2011 and the company’s subsequent rebranding as FGL Sports. He’s also the person in charge of ensuring that while many things are changing at the company, FGL’s sports-crazed, relaxed, Generation-Y-friendly culture remains as strong as ever.
“We weren’t buying a fixer-upper when we purchased what is now FGL Sports,” Medline, the former president of Canadian Tire Automotive and Dealer Relations, stresses. “Seventy-two per cent of Sport Chek’s sales are soft goods, whereas at Canadian Tire it’s more hard goods, so it’s a very different mix of customers shopping at different times, which is why putting these companies together made sense.”
What retailers strive for is sector dominance, particularly in sectors as lucrative as sporting goods. They also seek to mitigate competitive risks, which Canadian Tire saw emerging from south of the border as an ongoing stream of U.S.-based retailers started to flood the Canadian market. For those reasons, the Forzani acquisition made strategic sense for Canadian Tire, with the plethora of synergies, service-boosting best practices and marketplace advantages that could be shared between the two companies.
FGL is now widely seen as the leading force in Canadian sporting goods – but Medline has no intention of simply playing out the clock. Instead, the president is embarking on an ambitious brand consolidation and store expansion strategy to turn FGL into a truly national “superbrand.” His multi-stage approach involves shelving several less-profitable Forzani brands (such as Sport Mart and Athletes World) for a net loss of 95 stores, while adding an additional 100 stores to the chain over the next five years (the equivalent of two million square feet of additional retail space), in both suburban and urban settings. Some of those new urban flagship stores will stretch to a whopping 80,000 square feet. “Our vision is to be the conduit between the Canadian sports consumer and the best brands in the world,” Medline says. “The keys to our strategy are growing our footprint in urban markets and establishing that emotional bond with our customers.”
Another element of that strategy was protecting FGL’s decidedly unpretentious corporate culture – no small feat in any acquisition situation, but one made even more difficult by the strength of the sporting good retailer’s bond with employees. “When you acquire, you can’t think you know better than the people who have been running [the business] for decades,” Medline explains.
As part of its recruitment strategy in recent years, the Forzani Group decided that it would only hire people who were truly passionate and knowledgeable about sports. Medline (a self-avowed sports fanatic who plays golf and tennis as much as possible, adores the Blue Jays and was glued to the TV during the London 2012 Olympics) loved the idea and maintained the recruitment program when he assumed management of Forzani’s 13,000 employees, most of whom work at store level.
To indulge that passion, FGL allows flex-time to give its associates time to get out on the links, the ice or the court to play their favourite sports. It’s one of the tactics that Medline says produced “best-in-class” employee retention numbers at the now-defunct Forzani Group, which have remained constant since the acquisition. “I expected bigger turnover, but it didn’t occur,” Medline says. “I think one reason is the level of respect we showed for the company culture, history and people, and because they realized we have a passion for sports.”
Low turnover rates can also be attributed to good internal communication, particularly as brands were being consolidated and changes were made at the senior management level. Medline worked tirelessly, travelling to stores and meeting with staff at head office to stress that he had no intention of gutting FGL’s unique culture. “I said, ‘We’re going to have new strategies and tactics, but we respect your strengths and talents and that’s why we purchased this company,’” Medline recalls. “I think that resonated, but nobody believes anything until you do it.”
Another immediate step he took: reimagining FGL’s digital strategy, both in-store and online, and embracing exciting new technologies. At that point in the conversation Medline pauses and points to a towering, empty wall in the east-end Toronto store we’re touring: he thinks it would be the perfect showcase for a massive digital screen. “You can’t have a digital connection outside the store that’s different inside the store,” he insists. “We’re going to use our stores as laboratories to see what customers like and what our vendors can do.” Targeted advertising, athlete sponsorships and social media are key pillars of his renewed digital marketing strategy, as well as patience to give these marketing tactics enough time to deliver returns.
The chain’s new “Your better starts here” tagline took months of research to perfect and deploy, for example, but Medline feels it’s already delivering the authenticity-reinforcing attention it was intended to garner. Signing Pittsburgh Penguins perennial all-star Sidney Crosby and Canadian-born Blue Jays third baseman Brett Lawrie as top pitchmen doesn’t hurt, either. “We have to engage people who are participating in sports, then equip them to do that,” Medline explains. “‘Your better starts here’ is all about the customer doing the activity and improving themselves physically and mentally.”
Finding ways to help them play better or exercise more effectively extends to social media channels such as Twitter and Facebook, as well. FGL has seen its number of friends grow on the latter to more than 700,000 from just 70,000 a year before, thanks to a focus on engaging online audiences and potential customers with exciting information and sports-related thought leadership. “It’s about interacting with customers in a more modern, but at the same time a more old-fashioned, way,” Medline says. “It’s about building up relationships one person at a time.”
If Medline still worries about the possibility of another retailer from the U.S. arriving to challenge his company’s supremacy, his game face doesn’t show it. “If you do a great job and you have that emotional connection with the customer and you’re putting up exciting stores, you don’t have to worry as much about competitors,” he stresses. “Competition makes you better, and I use the spectre of competition to drive us to greater heights.”
And with that, he leaves the store with as little fanfare as when he arrived.