Athletic retail seems to be a team sport. Last week, Dick's Sporting Goods
Even as companies like Cabela's
Sportsman's is an interesting entity. It has more than doubled since being singled out last year in our Hidden Gems newsletter. After strong growth last year, it would seem that the company would have no problem inching higher organically, but buying The Golf Warehouse makes perfect sense.
As a well-run catalog retailer of sporting goods, Sportsman's has embraced the Internet to the point where more than a third of the company's sales are now being generated online. The Golf Warehouse is actually an online retailer that sells discounted clubs and game-related gear on its TGW.com site. It also launched a print catalog business two years ago.
Don't worry. Sportsman's isn't aiming at a bubble. TGW.com managed a modest operating profit last year on $40 million in sales. The deal is also expected to be accretive to the bottom line. While the greens specialist is being purchased at 0.75 last year's sales (a tad higher than Sportsman's own multiple), it is still a reasonable price to expand the company's online presence through a proven player.
Not simply surviving but thriving against the big-box sporting goods players and discount department store chains like Wal-Mart
Are you ready to golf this summer? Have you ever cheated on your scorecard? How do you practice your drive when you're not on the course or at a driving range? All this and more in the Foolish Golf Tips discussion board. Only on Fool.com.
Longtime Fool contributor Rick Munarriz lives within walking distance of a few great golf courses, but he still has problems tackling the miniature putt-putt variety. He does not own shares in any companies mentioned in this story.