Large Market, Changing Tastes Spell End for Oshman’s in Irvine

Oshman’s Sporting Goods Inc. closed its SuperSports store in Irvine on Sunday and may close more than a third of its 11 California stores--including one in La Habra--to cut costs.

“The sporting goods business got overcrowded,” said Alvin N. Lubetkin, Oshman’s chief executive. “We’ve only gotten modest performance out of our stores in Orange County and Los Angeles.”

The Houston-based retailer said Monday that it lost $1.6 million for the fourth quarter of 1998 and posted a $2.1-million deficit for fiscal 1998. It earned $5.6 million in the fourth quarter of 1997 and $2.4 million for fiscal 1997.

Retail industry analysts said sporting-goods chains have been hurt by a decline in the popularity of high-end athletic shoes and apparel. In addition, analysts said, Oshman’s and its competitors are feeling the effects of rampant overdevelopment in the late 1980s and early 1990s--a period when brands such as Nike were hot.

In addition to La Habra, Oshman’s said it may close stores in Camarillo, West Covina and Palm Desert.

The company opened its SuperSports store in Irvine two years ago with great fanfare, saying it would pursue the larger-store strategy. The opening came after Oshman’s closed seven of its smaller Orange County stores.

Analysts said sporting goods retailers have been hurt by changing consumer tastes. Teenagers and young adults aren’t clamoring for functional athletic sports apparel and sneakers like they did just a few years ago. They want a fashionable, sporty look, and in many cases they’re looking for it in department and specialty stores.

“It appears to me that the fashion side of that apparel industry has moved on to other horizons, like Tommy Hilfiger or Abercrombie & Fitch,” said sporting goods industry analyst Harry G. Katica of Prudential Securities.

Athletic footwear sales, which make up a hefty part of the bottom line of most sporting goods stores, slipped for the first time in recent history last year to $13.8 billion from $14.7 billion in 1997, according to the Sporting Goods Manufacturers Assn. And many adults are now turning to specialty stores such as outdoors-oriented REI for their gear and discounters such as Wal-Mart for low-priced sports equipment.

As the number of outlets carrying sporting goods grows, retailers such as Oshman’s face a harder time competing for customers.

“There are too many stores out there, and for the moment there is also a glut of inventory,” said William Armstrong, an industry analyst with brokerage Fahnestock & Co. in New York.

The industry has gone through a rapid consolidation in the last two years.

The country’s largest sports retailer, Gart Sports Co. of Denver, acquired the Sportmart chain in 1997 and made an unsuccessful play for Sports Authority. Herman’s, a retailer in the East, sought bankruptcy protection. And Oshman’s has been pruning stores; in 1991, it closed a store in the Westminster Mall and laid off workers at its regional headquarters in Santa Ana.

Bigger hasn’t proved better in the sporting goods industry, analysts say. Superstores such as the Oshman’s near the Irvine Spectrum have been hit harder than smaller outlets because of their huge inventories, sterile warehouse atmosphere and lack of adequate staffing to explain key equipment features. In December, one of the country’s largest sports megastore chains, Tampa, Fla.-based JumboSports Inc., filed for bankruptcy protection and is shuttering 17 of its 59 stores.

But Oshman’s Lubetkin said the company still believes in the superstore concept and plans to open two to five more SuperSports stores outside California. He said the small number of stores it has in the state makes economical advertising difficult.

Oshman’s shares fell 6 cents to close at $2.94 on the American Stock Exchange.

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Oshman’s Halves OC Presence

Oshman’s Sporting Goods, hurt by declining popularity of big-ticket athletic shoes and apparel as well as increased competition at both ends of the price spectrum has closed some California stores, including its location near the Irvine Spectrum. It may close its other Orange County store if it can find someone to take over its lease.