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 645 Finish Line stores in more than 45 states, about 50 Running Specialty stores, and 200-plus branded shops inside department stores ( Macy's). 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 adidas, NIKE, and Timberland) 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 Indianapolis-based company has Finish Line stores in 47 states and the District of Columbia. Its largest markets are Texas, Florida, California, Pennsylvania, and Ohio, home to about a quarter of Finish Line stores. Its 49 Running Specialty stores are located in 11 states and the District of Columbia, with Texas, Massachusetts, and New Jersey accounting about half of all locations. The shoe retailer also has branded Finish Line shops inside department stores (including Macy's) in more than a dozen states.
The retailer's namesake stores average some 5,400 sq. ft.; its Running Specialty stores average 3,500 sq. ft. Finish Line also operates e-commerce sites at www.finishline.com and www.run.com, a domain it purchased in 2011 to serve as the website for its Running Specialty holding. Footwear accounts for 88% of Finish Line's net sales. While Finish Line purchases products from some 120 suppliers, NIKE products (some sold exclusively at Finish Line) generate about 70% of total sales. About 84% of the retailer's merchandise is purchased from its five largest suppliers. Apparel and accessories (also referred to as softgoods) account for about 12%.
Sales and Marketing
The Finish Line reported $41.8 million in advertising expenses in fiscal 2014 (ended February), up from $39.9 million and $35.8 million in 2013 and 2012, respectively.
The company's sales increased 16% in fiscal 2014 (ended February) to $1.67 million, while net income rose 8% over the same period to $76.9 million. Fiscal 2014 marked the fourth year of of rising sales after a slump during the Great Recession. The company credited the double-digit increase in revenue to a 4% gain in same-store sales, increased sales at shops in department stores, and increased sales in its Specialty Running shops.
After closing more stores than it opened in both fiscal 2010 and 2011, Finish Line is back in growth mode. While its core Finish Line store count has remained relatively stable, the retailer has been adding Running Specialty stores and Finish Line branded shops in more than 180 new department stores of late.
A deal with department store giant Macy's,making Finish Line the exclusive provider of athletic shoes to Macy's stores (and macys.com), has resulted in some 450 leased departments inside Macy's department stores. Under the terms of the agreement, Finish Line will recognizes sales and corresponding profits, less the licensing fee paid to Macy’s. Over the long term, the agreement is expected to result in additional sales to Finish Line of $250 million to $350 million annually.
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) be its most visible stores, attracting about 422,000 visitors daily.
Mergers and Acquisitions
In a move that revised its retailing strategy, Finish Line in late 2011 acquired a chain of 18 running shoe specialty stores in eight states for $8 million. The chain operates under several banners, including Greater Boston Running Co., Texas Running Co., and New York Running Co., among others. Located in seven states and the District of Columbia, the stores were renamed The Running Company and formed Finish Line's second retail division, Specialty Running Group (SRG).