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Racquet Club Pro Shop continues record growth: Team sales pushing specialty retailer's expansion

August 4, 2008

In the midst of a down economy and tepid interest in tennis, the only problem the Indianapolis Racquet Club Pro Shop has is where to expand next.

Pushed by double-digit-percentage sales growth in nine of the last 12 years, the IRC Pro Shop has expanded from a 750-square-foot shoebox to become an industry giant in the specialty tennis category.

Most tennis club pro shops are breakeven operations, but IRC officials said they have seen profit grow each of the last 12 years on revenue that is nine times what it was in 1996.

The retail shop recently completed its third expansion in the last decade, bringing it to 3,300 square feet. In 2005, the Tennis Industry Association, a South Carolina-based trade organization, named the local shop one of the top 10 tennis specialty stores in the United States based on size, sales volume and customer service. Industry sources said, based purely on space, it's the largest pro shop connected to a tennis club in the United States.

"I guess we could expand up," joked Jeff Rodefeld, IRC's director of retail operations.

Much of IRC's success has come at a time when interest in tennis in the United States has been lukewarm.

In the 1970s, American stars like Jimmy Connors, John McEnroe, Billie Jean King and Chris Evert sparked a boom in tennis participation.

In the mid 1980s, interest waned, and many tennis clubs went under.

The recreational game has still not recovered, though U.S. Tennis Association studies indicate there has been modest growth in participation since 2003, spearheaded by a youth movement. IRC has capitalized on this youth movement by selling to high school teams across the country.

IRC officials declined to divulge revenue, but said the store brings in about as much as dues, court fees, lessons and all other services combined.

Tennis industry experts estimated the store could gross $2 million to $5 million annually.

While the economy has flagged, tennis specialty stores have done OK. According to TIA, sales at specialty shops have increased more than 30 percent since 2003, from $88 million to $114 million.

Despite those numbers, some industry insiders said they have seen many in the specialty-shop category struggle.

"It's not an easy business to operate," said Steve Rothstein, who represents tennis goods manufacturers Head, Penn and K-Swiss throughout the Midwest.

"The reality is, much of the growth in tennis is going to the big boxes like Dick's [Sporting Goods] and Wal-Mart. Those specialty shops that aren't wellmanaged have gone away."

IRC hasn't had such problems.

"Hands down, it's got to be the nicest tennis shop attached to a club in the country," Rothstein said. "They've done it by connecting to youth tennis and tournaments, carrying a strong inventory and providing great service."

Since Rodefeld left Macy's in New York 12 years ago and joined IRC to be closer to family, the pro shop's staff has grown from one full-time and two parttime employees to eight full-time and four part-time staffers.

The pro shop's reputation spread far beyond the club's 3,257 members. Sixty percent of revenue comes from those who don't belong, Rodefeld said.

Rodefeld three years ago hired Kevin Lindley, a former Dunlop sales representative and Reebok's national brand manager for tennis, to help grow IRC Team Sports, a division that accounts for a quarter of the shop's revenue.

IRC initially began offering uniforms, matching sweat suits, T-shirts and shoes to a handful of area high school teams in 1998.

Under Lindley, IRC has grown the business to include more than 1,100 schools, including 99 in Illinois, 92 in California, 63 in Ohio, and 59 in Florida, Lindley said.

While Division I colleges are difficult to penetrate due to existing contracts with sporting goods manufacturers, IRC has made team apparel deals with the universities of Dayton, Missouri, Georgia and Maryland.

IRC's school clients have also begun to buy other items from the pro shop, including tennis balls, nets, racquets and other equipment, Lindley said.

"Before we started doing business with IRC six years ago, we'd go one place for uniforms, another for silk screening, and another for equipment," said Rick Scotten, head coach of the boys and girls teams at Brebeuf High School. "The offering they have is more like something you'd see in a tennis hot bed like Florida."

Park Tudor High School tennis coach Dave Heffern remembers when companies like Adidas wouldn't deal with the IRC Pro Shop in the mid 1990s because it was too small.

"They are incredibly well-connected in the world of tennis," Heffern said. "Word of this operation has spread and continues to spread well beyond the state of Indiana."

In 2007, team sales increased 127 percent and in the most recent fiscal year, which ended July 31, team sales increased 45 percent, Rodefeld said. IRC officials are now contemplating diversifying into other sports.

"While there are quite a few companies that focus on football, basketball and baseball, we think there is an unserved market in sports like golf, lacrosse and volleyball," Rodefeld said.
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