|
Gotta go to Mo's?
|
 |
July 17, 1998: 5:04 a.m. ET
Retail legend Modell's keeps scoring according to 109-year-old game plan
|
NEW YORK (CNNfn) - Even on the rough-and-tumble playing field of the $43 billion sporting goods industry, smaller players with grit and moxie still can make a name for themselves while the 800-pound gorillas struggle to consolidate or be left in the dust.
New York City-based Modell's is one of these smaller players. Founded in 1889, the chain is the oldest family-owned sporting company in the country, and the current generation -- the fourth to run Modell's -- is staying true to the basic game plan that built the company: imagination, speed, fun.
Every Monday morning meeting at the Modell's corporate headquarters opens and closes with a motivational "Mo's Chant" (78Kb WAV) or (78Kb AIFF), a warm-up for another week of selling not just sporting goods, but the company itself.
In true New York style, Modell's doesn't skimp on self-promotion. It spends $20 million in advertising annually, blasting its name on radio and TV, plastering it in newspapers and at ball parks like Yankee Stadium. Its stadium and arena signs link Modell's with local teams in the eyes of millions of TV viewers every season.
"Their strategy seems to be very sound in that they do offer a solution to the consumer in that they're offering great branded product at very good prices," said Annie Erner, an analyst at UBS Securities. "That's something that consumers like to have."
As a regional family business, Modell's is a closely knit organization that can outmaneuver larger national chains as the industry consolidates. In other words, the company's got hustle.
"We're able to respond to the needs of our customers a lot faster. If an item is hot in cities it get lost," said Michael Modell, company co-president. "You know just like the old telephone game where it starts one way and by the time it gets to the end of the line it's a totally different story. We shorten the line considerably."
Michael is one of two brothers who currently run the family business -- the other, also a co-president, is Mitchell Modell.
They took the reins from their father, William, in the late 1980s, continuing a tradition that goes back to their great-grandfather Morris, a Russian immigrant who started selling menswear from a pushcart on the Lower East Side.
"At that time West Street was a major port and he would start with the menswear, (a) whole menswear line for sailors and the visitors coming in to visit the country," said William Modell, now the company's chairman.
Morris Modell opened the first Modell's in 1889 on the site where the World Trade Center now stands. His seven sons worked in the business, but only one -- William's father, Henry -- stayed.
According to William, Henry was a brilliant retailer whose stores offered customers great value and low prices on menswear, sporting goods, outdoor equipment and fitness clothing.
"He was dynamic," William said. "He had a great imagination, great merchandiser, great promoter and just fun to be with and he stimulated, I believe, my interest in going into business because it was a fun activity for me."
Part of the chain's early successes came from selling Army and Navy surplus clothing at bargain basement prices, setting the tone for its reputation as a discount retailer.
William grew up working in the stores and made Modell's his career following World War II, gradually taking the company over from his father, who died in 1984.
"My father really -- he never told us what we had to do in terms of working the stores," said Mitchell Modell, company co-president. "We loved the stores. It's where the action is. It's where you're dealing with the consumers every day, and that's how we basically got started."
From the 1960s into the 1980s, Modell's grew steadily in the sporting goods market, buying out stumbling competitors.
Still, key suppliers like Reebok (RBK) didn't like the stores' lingering Army-Navy discount ambience, so Mitchell and Michael spent millions renovating.
"I told the vendors to sort commitment from Modell's," Mitchell said. "That we would be able to, you know, update our stores. Get away from that discount image. Still giving the customers tremendous value, but they wanted to make sure that their merchandise was presented in a proper fashion."
In 1996 Modell's snapped up 14 stores when New York arch-rival Herman's went bankrupt. Today, the chain has nearly 80 stores across New York, New Jersey, Virginia, Pennsylvania and the District of Columbia, with sales reaching $340 million.
To prevent the personal tensions that plague many family businesses, William gave his sons separate responsibilities. Mitchell oversees merchandise and marketing. Michael handles real estate and finance.
"Michael and I have a phenomenal relationship," explained Mitchell. "You know in most family businesses it becomes tough because everything becomes intertwined and ... everyone digs into the other person's responsibilities and area, and that's something that my father really had great vision on."
The brothers have no plans to take the company public, saying they'll expand Modell's at the same gradual pace of the last 109 years. Michael and Mitchell each have children, but they say they'll follow in their father's footsteps and avoid pressuring their kids to join the business.
"I want to encourage them to do whatever they love, because if there is one thing in a family business, there is no watches," said Michael. "I mean you do whatever it takes to get the job done. You never look at a clock in terms of what time you have to go home and, you know, it's a commitment that you really have to love what you do and enjoy what you do. So that's a choice only that they could make." 
|
|
|
|
|
|
Modell's
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
