The Finish Line is engaged in a three-legged race for athletic footwear sales. The company sells performance and casual footwear and apparel through about 590 Finish Line stores in more than 45 states, about 70 JackRabbit stores, and 300-plus branded shops inside department stores (
). Its core Finish Line stores are bigger than competitors' and offer a wider array of clothing, accessories, and other merchandise, including jackets, backpacks, sunglasses, and watches. Finish Line offers big brand names (such as
) and also markets its own private-label line of T-shirts, socks, and other basics. The company also sells athletic shoes and apparel online.
The retailer's namesake stores average some 5,400 sq. ft.; its JackRabbit stores average 3,650 sq. ft. Footwear accounts for 88% of Finish Line's net sales. While Finish Line purchases products from some 120 suppliers,
products (some sold exclusively at Finish Line) generate about 70% of total sales. About 89% of the retailer's merchandise is purchased from its five largest suppliers. Apparel and accessories (also referred to as softgoods) account for about 12%.
The Indianapolis-based company has Finish Line stores in 47 states and the District of Columbia. Its largest markets are Texas, Florida, California, Illinois, Pennsylvania, and Ohio, home to about a quarter of Finish Line stores. Its 72 JackRabbit stores are located in 17 states and the District of Columbia, with Texas, Michigan, New York, and New Jersey accounting about half of all locations. The shoe retailer also has branded Finish Line shops inside department stores (including
) in more than a dozen states.
Sales and Marketing
Nearly all of the company's merchandise is shipped directly from suppliers to its distribution center in Indianapolis, Indiana, where the it processes and ships the merchandise by contract and common carriers to its stores/shops or directly to customers.
Finish Line reported $44.2 million in advertising expenses in fiscal 2016 (ended February), up from $39.2 million and $41.8 million in 2015 and 2014, respectively.
The company has achieved record-setting growth over the years, with revenues peaking at $1.89 billion in 2016, a company milestone. Profits, however, nosedived by 73% from $82 million in 2015 to $22 million in 2016.
Footwear sales increased 5% in 2016 primarily driven by percentage increases in the low-single digits in men's, low teens in women's, and mid-single digits in kids' footwear sales. Softgoods sales were negatively impacted by the replacement of the company's warehouse and order management system in the third quarter of 2016.
The massive drop in profits for 2016 was driven by a large spike in selling, general, and administrative expenses related to the company's supply chain issues as a result of the replacement of its warehouse and order management system.
As its brick-and-mortar operation is streamlined, Finish Line is focusing more on its e-commerce and mobile businesses. The company is investing in its online channel with design and content upgrades, mobile and tablet applications, and an expanded presence on social media and platform enhancements. Indeed, the company considers its online sites (finishline.com and run.com) to be its most visible stores, attracting about 496,000 visitors daily.
In 1976 boyhood friends Alan Cohen (a lawyer) and David Klapper (a retailer) founded Athletic Enterprises, the Indiana franchisee for The Athlete's Foot. By 1981 they had all The Athlete's Foot stores that the state's big malls could hold -- about a dozen. To expand beyond those confines, the pair teamed up with Dave Fagin and Larry Sablosky and formed The Finish Line.