Garts Say They Are

Committed To Specialty Culture

Plan to open new RunCo stores by the end of the year;

Still Searching for right acquisition fits

Ken and Tom Gart have been involved in a few retail roll-ups, but one store they acquired stands out in their collective memories.  In the late 1990s, the brothers were buying up ski specialty stores on their way to building a $200 million specialty business. As part of that, they purchased Colorado Ski and Golf, a single store retailer owned by Jerome Grady, a colorful individual loved by his customers and staff. “This store was known for going the extra mile.

They’d tune your skis for free and had just a great overall culture of customer service,” says Ken.

A year after the acquisition Tom Gart was riding the chair lift at Vail and asked another skier where he had purchased his skis. “He told me he bought them at Colorado Ski and Golf and  just went on and on about what a great store it was and how wonderful the service was,” Tom recalls. “That made me feel great because I knew we had been able to retain the culture and qualities that made that store so special.”

The Garts are hoping that formula Their company, Gart Capital Partners, along with Finish Line has announced its intentions to roll up more than 100 run specialty stores. The foundation for the roll-up will be the 18-store Running Company chain acquired by TFL in September 2011. Gart Capital has since invested $10 million in that business and has taken over store management, buying, merchandising and will also spearhead acquisitions and new store openings. Finish Line will provide the cash for acquisitions and will also run the online business under the direction of Chris Ladd, a former Lululemon exec it hired last fall.

“We’re in the process now of decoupling from Indianapolis (where Finish line is based),” Tom told Running Insight recently in an exclusive interview. “They are smart to realize that specialty is a different deal. Finish Line is good at running 700 mall-based stores. We’re good at doing this. Big guys can’t do specialty, as well as an organization like ours.”

The Garts have set up an office in Colorado, hired a controller and a general merchandise manager Jon Juenette, who spent 10 years with them at Specialty Sports Ventures, and say they plan to open four to five new Running Company stores in the next six months. The stores will open in are where the RunCo stores are already doing business.

Meanwhile the Garts are hard at work seeking running stores to buy.

“We would love to do a significant acquisition this year,” Tom said. Ideally the store acquired would be a two-tofive store group with dominant market presence that would be in a position to expand with the right influx of cash.

The Garts say they would like owners of acquired stores to stay on for at least a while after an acquisition. “As the new owners, we’d love to keep that connection to the local market,” Tom says. “And for the owners, our pitch is that they can get rid of headaches like IT and bookkeeping and keep doing the things they like that add value to the business.”

The brothers say they don’t have a pre-set formula in mind when purchasing a store. “Deals are not formulaic,” Ken said. “How we would structure a deal has to do with the owners’ personal situation, the tax consequences and a number of other variables. We try and be solid financially but flexible on everything else.”

When the Garts were building their Specialty Sports Venture to 200 stores, they operated stores under different names, with different cultures and different personalities and say to be successful in running they’d have to do the same thing. Although they’re setting up a buying office in Colorado, they also plan to keep some buying at the local level.
  For the Garts, the new venture represents the third time they have been involved in a roll-up in the sports retail market. Tom and Ken started their careers working for their father Jerry, a charismatic and driven entrepreneur who built Gart Brothers, a major sporting goods chain based out of Denver. Gart sold out to Thrifty Corp., a California-based chain, and eventually rolled up a number of smaller regional sporting goods stores, such as Brown’s, Casey’s and Koenigs.
  Gart then sold out to a larger entity and the brothers launched Sports Specialty Ventures, which rolled up more than 140 stores with revenue over $200 million annually. That is the model the brothers think is most applicable to the run specialty space.

“We respect the heart and soul of specialty retail,” Ken said. “We want to celebrate it, not screw it up. We believe if we do our jobs correctly, we can help grow the running business in a way that benefits everyone.”

PRESS RELEASE

The Finish Line, Inc. FINL -0.04% today announced that Gart Capital Partners (GCP) is making a $10 million strategic investment in Finish Line’s Running Specialty Group with the goal of creating the nation’s single largest operator within the growing specialty running business, a market that has been estimated at up to $1 billion. Finish Line remains majority owner of the Running Specialty Group.

The strategic investment pairs Finish Line, a $1.4 billion national athletic footwear and apparel retailer, with GCP, an equity investment partnership that has a proven track record of successfully executing specialty retail rollups, including a 12-year joint venture with Vail Resorts, Inc. MTN -0.79% that involved more than 150 ski-related shops generating $200 million in annual sales.

The headquarters of the Running Specialty Group will be relocated to Denver, where GCP will manage all day-to-day operations as well as merchandising and the acquisition of additional running operators from its home base there. Finish Line will continue to leverage its strengths as a leading omni-channel retailer, providing direct logistics, marketing and IT support along with digital expertise. In fact, this spring, the Running Specialty Group will launch Run.com, a digital experience for runners that will be the segment’s first to marry content, community and commerce.

For Finish Line, the venture builds upon the 2011 acquisition of an 18-store chain of specialty running shops operating under The Running Company banner. This acquisition represented a first step in pursuing the significant market opportunity within specialty running, which today is a highly fragmented market with limited e-commerce penetration.

“We are excited to take our specialty running growth plans to the next level with GCP,” said Finish Line Chairman and Chief Executive Officer Glenn Lyon. “Like the ski retail business, customers within specialty running prize a shopping experience that is expert, highly localized and infused with the sport’s unique culture. Maintaining the individual personality of each running store concept, while providing the synergies of larger-operator systems and back office support, is critical for success. GCP has a proven track record of demonstrating that these principles can be maintained while simultaneously executing a successful rollup strategy. We look forward to growing this business with GCP and are confident that our association will accelerate progress and perhaps serve as an incubator for expansion outside of specialty running down the road.”

“We are excited to partner with Finish Line to create this innovative approach toward growth in the running specialty channel,” said GCP Partner Ken Gart. “We bring the ability to celebrate the unique culture of independent running stores and maintain what makes them great in their local markets while Finish Line brings the efficiencies of a large scale and expertly run retail operation. We’ve achieved success using this type of model with Vail Resorts in the ski business and look forward to applying the same dynamics to the world of running as we seek out and acquire additional operators. This is a time of change within specialty running and we are out in front leading it.”

About The Finish Line, Inc. The Finish Line, Inc. is a premium retailer of athletic shoes, apparel and accessories. Headquartered in Indianapolis, the company has two retail divisions — Finish Line, which operates 635 Finish Line brand stores in malls across the U.S., and The Running Specialty Group, which operates 19 specialty running shops in seven states and the District of Columbia under The Running Company banner. Finish Line stores employ more than 11,000 sneakerologists who help customers every day connect with their sport, their life and their style. Online shopping is available at www.finishline.com and mobile shopping is available at m.finishline.com. Follow Finish Line on Twitter at Twitter.com/FinishLine and “like” Finish Line on Facebook at Facebook.com/FinishLineUSA. The Running Company stores carry a deep assortment of performance running shoes, apparel and accessories. Their trained experts advise everyone from beginner to advanced runners and provide free gait analysis to ensure the proper fit for each customer. The Running Company is tightly connected to its communities, hosting regular neighborhood group runs and sponsoring local races. More information on The Running Company can be found at www.therunningcompany.net .

About GCP Gart Capital Partners (GCP) is a private equity investment partnership located in Denver, Colorado. The firm, a division of The Gart Companies, provides closely held and family owned businesses with private equity capital for ownership transition and growth. The firm currently owns a number of specialty retail businesses including GolfTEC, Magellan’s / Colorado Bag’n Baggage and Swoozie’s as well as a Colorado mountain resort, Powderhorn, and extensive real estate holdings along the front range. The Partners have a unique combination of practical operating experience in managing the day-to-day operations of businesses along with the sophisticated financial background to help independent companies grow.

Safe Harbor This news release may contain certain statements that the company believes are, or may be considered to be, “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe”, “future”, “intend”, “plan”, “expect”, “goal”, “will”, “estimate”, “provide”, “maintain”, “continue”, “create”, “launch”, “build”, “accelerate”, “execute”, “potential”, “confidence”, or other similar words, or statements that describe objectives, plans or goals. All of these forward-looking statements are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contemplated by the relevant forward-looking statement. There are several principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements, as noted in the company’s Securities and Exchange Commission filings and previous releases. The forward-looking statements included herein are made only as of the date of this report and the company undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

Denver, CO (March 8, 2012)  The Gart Companies, whose family name has been synonymous with Colorados active and sporting lifestyle for more than 82 years, is set to introduce its latest retail acquisition. Swoozies, a specialty-gifts shop, will open on March 9, at 589 Fillmore Street, in Cherry Creek North.

The Atlanta-based Swoozies was founded in 2001 by Kelly Plank-Dworkin and her husband David Dworkin, a prominent retailer. Together, the Dworkins launched Swoozies as a brand that would relieve busy moms like Kelly, a time deprived mother of three, who desperately needed to pull together the next birthday party or surprise bash, but didnt have time to run to 10 places to buy everything.

The Dworkins launched 47 Swoozies and won fans across the country as the go-to place for finding the perfect gifts for lifes celebrations. Unique, clever, beautiful items, some available only at Swoozies, provide a shopping paradise for the on-the-go woman.  Swoozies inventory can be summed up in its four-word slogan, presents, paper, printing and pizzazz!

Gart Companies Ken Gart, managing partner of Gart Capital Partners, said his company took notice of Swoozies because it shared Garts affinity for maintaining strong community ties, providing high touch service, and strong customer loyalty. When Swoozies pared down to 7 stores they soon had 20,000 Facebook entries from customers saying, What are we going to do without Swoozies?

Given our three generations of retail background, and our involvement in the community, we recognized that Swoozies was a great fit for us, Gart said. Their unique way of doing business has succeeded in creating a huge loyalty, particularly among women. It fills the need for the socially active, contemporary woman to offer family, friends, co-workers and fellow volunteers really special gifts. Imagine a woman dropping her kids off at school, on her way to one of her many volunteer committees, needing a gift for her best friends 40th birthday party that night. She can run into Swoozies, select a gift, have it beautifully wrapped and be out the door. Swoozies fills a niche Denver has never had.

Swoozies president, Kelly Plank-Dworkin, also saw a great opportunity in linking with the Gart name.

I cant think of a happier outcome than to be linked with the Garts, she said. Say Gart to anybody whos lived in Colorado for any length of time, and you get instant, positive recognition. Helping people enjoy life, much like the Gart stores had done for years, was exactly what David and I were going for when we launched Swoozies in 2001.

Swoozies locations are in Birmingham, AL; Palm Beach Gardens, FL; Atlanta, GA; Norcross, GA; Greensboro, NC; Greenville, SC; and Dallas, TX.

Interviews with Ken Gart and Kelly Plank-Dworkin are available by contacting Wendy Aiello at 303.355.3838.

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About Swoozies
Since 2001, Swoozies has been the go-to party planning shop for busy women.  The boutique store features invitations, stationary and gifts, many of which are personalized. The gift area of the store is theme based, changing with the seasons, but also features staples including birthday and wedding items that customers have come to expect of Swoozies. For more information visit www.swoozies.com

About The Gart Companies

The Gart Companies is comprised of two primary divisions:  Gart Properties, and Gart Capital Partners, a private equity business focusing on specialty retail.  Current holdings under the Gart Capital umbrella include Colorado Bag n Baggage and Magellans, Swoozie’s, GolfTec, and Powderhorn Ski Resort. While todays Gart Companies range from specialty sports retailing to real estate development, the original Gart touch remains:  the ability to identify an opportunity, add value, and commit to the hard work and attention to detail it takes to bring every venture to a successful outcome.

The merchandise mix constantly changes, according to Kaily Cooke, who is managing the store. Front and center for the opening will be spring and Easter-themed items such as plush bunnies, cannisters of jelly beans, brightly colored tote bags and lemonade pitchers.

This is the first Swoozie’s in Colorado; six others are in southern states. The company was started in Atlanta in 2001 by Kelly Plank-Dworkin and her husband David. Plank-Dworkin figured there were other mothers like her, juggling work and family and trying to figure out how to plan birthday parties and special events, so she created a store where you can find most of what you need under one roof.

Denver-based Gart Capital Partners bought Swoozie’s out of bankruptcy in 2010. Ken Gart, managing partner , said the company was pleased to be able to put the store in the location of the former Cherry Creek Card and Party Shop, which opened in 1964. The building was bought by Larimer Associates in 2011. “We were so lucky to find something in Cherry Creek with parking, on Sixth Avenue and near our offices so we can be close to what’s happening there. I think they will really fill a niche for people shopping for presents who want to save time.”

Plank-Dworkin bought merchandise for the store with Colorado shoppers in mind, stocking pillows printed with the names of ski resorts, and such items as recycled glass candles. Prices range from a couple of dollars for a greeting card to a couple of hundred for large stuffed animals and luggage-sized bags. A signature item is Nam’s Bits cookies, bite-size concoctions sold in multiple sizes and monogrammable containers.

Cooke says the store will be able to print invitations on the spot when customers need them, and can also handle more elaborate printing needs. They can also monogram acrylic trays and pitchers, as well as such items as phone and laptop cases.

So where did the store’s name come from? “Kelly and David were in New York when planning the store and a colorful, vibrant woman walked by,” Cooke says. “David said, ‘She’s so swoozie,’ and Kelly said, ‘That’s what we’ll call it!’”

Gart said Swoozie’s shares the Gart family’s commitment to community, service and customer loyalty. The story will be teaming with local charities for fundraising events.Gart said the company will monitor how the store performs before deciding to open additional locations.

Hours will be 10 a.m. – 7 p.m. Monday – Saturday; noon – 5 p.m. Sunday; 720-328-7195; more at swoozies.com

Penny Parker’s column appears Sunday, Tuesday, Thursday and Friday. Call her at 303-954-5224 or e-mailpparker@denverpost.com; follow her attwitter.com/denverpostpenny.

Hold onto your Spandex knickers, the Powderhorn tubing hill opens Saturday.
The latest addition to Powderhorn Mountain Resort is a 352-foot tubing on just west of the EZ Rider lift.
The lift is scheduled to open 10 a.m. Saturday and you can see a preview on the Powderhorn Facebook page, http://www.facebook.com/skipowderhorn.
The lift is open to all ages. Tickets will cost $15 per hour for non-season pass holders and $12 per hour for season pass holders.
Price includes rental of a tube.
A “Name the Lift” contest runs until noon, Jan. 13. Details on the Powderhorn Facebook page.

“Even better,” Andy Daly said as he loaded up on his first-ever ski day at Powderhorn ski area, the 1,600-acre hill on the Grand Mesa he purchased with Denver’s Gart brothers in August.

The 30-year resort-industry veteran has returned to the ski industry after a decade hiatus, joining Ken, Tom and John Gart in an ambitious effort to breathe new life into the undercapitalized 45-year-old ski area they purchased for a mere $1.4 million, in a deal that included 600-plus acres of undeveloped real estate.

As if to welcome the new owners on opening day, Mother Nature blanketed their hill with more than a foot of feathery snow that gleamed under a cloudless sky.

“I just can’t wait for people to see this,” said Ken Gart , the Denver retail magnate who skied Powderhorn for the first time Thursday with his 9-year-old son, Jeremy.

Gart was downright giddy all day, raving about the snow, the terrain, the views, the employees and even the vegetable panini sandwiches he ordered in the slopeside cafeteria for both breakfast and lunch.

“Just look at this,” he said, sweeping his arm across the snowy vista of the pristine Grand Mesa. “This place is undiscovered. Outside of maybe Telluride, this is the prettiest ski area in the state. It’s just so special. What have we done to deserve this?”

Active in the community

Locals too are animated in welcoming the new owners. Already Ken Gart and Daly have played active roles in local circles, serving on executive boards and fostering new relationships in the Grand Valley’s business community.

“We are all so excited to have their wealth of expertise and knowledge at Powderhorn,” said Kelly Flenniken, executive director of the Grand Junction Economic Partnership. “In the short time they’ve been there, we are already seeing the benefits. We think that growth and development like that just breeds additional growth and development.”

Daly was equally effervescent on his first day skiing at his new hill. After a 30-year resort career that included ski patroller at Aspen Highlands and president at Vail Resorts, Daly is relishing his hard-earned role of captain of his own ship. The silver-haired leader — who now serves as Vail’s mayor after four years on the town council — revived Boulder County’s dormant Eldora ski area in 1987, sparking a renaissance that has seen the resort’s visitation climb from 70,000 in the late 1980s to more than a quarter million last season.

Powderhorn sees about 80,000 skier visits a year, and Daly is pushing hard to grow visitation by capturing the drive-by skiers who pass the Grand Mesa en route to other resorts.

Daly also piloted Ski Broadmoor in Colorado Springs in the late 1980s during a brief push by Vail to grow urban feeder resorts.

Daly finds himself falling back on those Eldora and Ski Broadmoor days, emphasizing the downhome customer service he hopes will differentiate his hill from the popular resorts that surround it. He’s pushing his employees to find new passion for their work and giving them room to explore different positions on the hill.

“It seemed like some of the employees were tired and just needed a change,” said Daly, who has hired a general manager and mountain manager who, while resort-industry veterans, are new to both positions.

Many improvements

The employees are excited for the new energy at Powderhorn.

“When we heard Andy was interested in buying it, a lot of us were pretty excited,” said longtime ski-school director Kate Belknap, whose plan to retire from the ski area was suspended after talking with Daly.

On top of the cultural changes Daly is stirring among his workforce of some 343 employees, the veteran has improved terrain, thinning glades to expand Powderhorn’s abundant tree skiing and building a halfpipe for the younger set.

In the past few months, the new owners have shined up the outside slopeside and deck and are growing the resort’s dining option. There are plans for improved snowmaking and grooming.

The primary focus early is to make visitors happy. That’s something both Daly and the Garts, with a customer sense honed from steering their retail company for decades, are built to do.

“It’s such a great partnership,” Daly said. “They understand the business intimately, and it’s a good match.”

Daly uncannily knows every Powderhorn employee’s name. He chats with locals, lift operators and cashiers at Powderhorn as if they were old pals.

“We’ve had overwhelming support from the local community,” he said. “It’s been heartwarming, flattering and humbling. And it’s something I’ve never seen before.”

Genuine affection between a ski-resort company and the community where it operates is rare. But in the Grand Valley, the ski area is embraced as an important economic engine.

“Grand Junction loves Powderhorn,” Gart said. “They call it the crown jewel of the Grand Valley. I mean, can you believe it? We are so lucky to be here.”

While the partners picked up the ski area cheaper than a condo in Vail, they plan to be studious with future investment. First build up the ski area — maybe with a big-ticket upgrade like a high-speed chairlift — then think about real estate, Gart said.

“We are just enjoying being hands- on,” Gart said. “It’s fun to be involved in something small again and building a culture. We are looking long term and building slowly. We will be re-investing for probably 10 years, and that’s totally fine.”

Jason Blevins: 303-954-1374 orjblevins@denverpost.com

Andy Daly and brothers Ken and Tom Gart bought the resort for a song at auction in September, paying a mere $577,500 for the resort itself, plus $825,000 for a 700-acre development tract below the resort.

They’ve already dumped another $800,000 into improvements for the 2011/2012 season, including building a 13-foot mini halfpipe, increasing grooming capacity by 50 percent, and improving the snowmaking operation. There are also cosmetic improvements to the Sunset Grille and Base Lodge, a new fleet of kids’ ski rental gear, and a new full-season rental program.

​Powderhorn is one of the featured resorts in the Colorado Ski Country USA Gems program, so if you’re planning on making the trip stop by any Credit Union of Colorado branch location and pick up the $10 CSCUSA Gems Card, which is good for $10 off any Powderhorn lift ticket as well as buy-one-get-one-free deals Monday through Friday, beginning January 8, and similar discounts at Arapahoe Basin, Echo Mountain, Eldora, Loveland, Monarch Mountain, Ski Cooper, SolVista, and Sunlight

And if you’re a first-timer, Powderhorn and the Grand Junction Daily Sentinel are offering one of the best deals we’ve seen anywhere: Sign up for the Learn to Ride Series and get rentals, lift tickets and three-day lessons (January 1,2, & 3 or the weekend series, January 7, 14, & 21) for $249. Make it to all three sessions and they’ll throw in a season pass good for the rest of the season.