Posted: 7:00 pm Sun, December 13, 2009
By Liz Farmer
Daily Record Business Writer
After opening seven stores over 20 years, Towson-based retailer Lax World is in the middle of an aggressive, three-store expansion to capitalize on the growing popularity of lacrosse while there are still deals to be had in the depressed commercial real estate market.
Lax World, which specializes in lacrosse equipment, clothing and accessories, opened a store in York Galleria Mall in York, Pa., in October and three weeks ago opened a store in the new Maple Lawn development in Howard County. The company is now scouting out a location in Bethesda, and executives say they hope to open a store there within a few months in time for the 2010 season.
Two of Lax World’s stores have also gotten bigger this year — its flagship store in The Shops at Kenilworth expanded into the open space next door in the mall, while its Bel Air location moved to the Harford Mall in a space 50 percent larger than its former South Main Street location.
Jerry Scott, the company’s director of operations, would not specify what kind of leasing deals Lax World was able to get but said they were “just too good to pass up.”
“We’re generally just about a slow and steady growth and not getting bigger just for the sake of getting bigger,” he said. “But if we’re going to do it, now’s the time to do it.”
Now is a good time for retailers who may have been eyeing a location but were unable to get a lease to make their move, said Rene Daniel, a principal of Trout, Daniel & Associates in Timonium.
“The [drop in rate] depends on the size and location of the mall,” he said. “But … the average rental across the board in malls nationally has probably dropped by close to $5 a square foot this year.”
(The average mall lease rate for Simon Property Group, which owns more than 350 retail properties across the country, is $40.05 per square foot, according to its most recent quarterly report.)
Lax World is targeting its expansion in locations it deems as hotbeds for the sport, based on where purchases are coming in through its Web site, Scott said. He noted York last year sanctioned lacrosse as a high school sport, which makes school district funding available.
Lax World also has two stores in Georgia, and one each in Colorado and Virginia.
The company’s name recognition among lacrosse players everywhere makes it a desirable tenant, said John Harrington, vice president and principal of MacKenzie Retail, who is representing the firm for the transactions.
“Here’s a tenant that … brings instant credibility,” he said. “Their target market is 6 [years old] to 18 so, for the most part, they don’t drive. So they are bringing their parents to the [retail] center and they’re a tremendous traffic generator.”
And that target market has been exploding in recent years. Participation in lacrosse has more than doubled this decade with a total of 153,525 boys and girls playing on high school lacrosse teams in the 2008-09 school year, according to the National Federation of State High School Associations, which tracks participation by sport. In 2000-01, there were 74,225 high school lacrosse players.
That’s translated to an increasing demand for equipment sales, which continue to climb despite the faltering retail economy. Lacrosse, football and hockey/ice skating equipment were the only high school sports retail categories that saw an increase in spending in 2008, according to the National Sporting Goods Association. Lacrosse showed the greatest growth of 3.9 percent to a total of $31.9 million.
Lacrosse and football are the only categories the association predicts will increase again this year with expected spending of $34 million and $98 million, respectively.
But it’s all relative — the total number of high school lacrosse players pales in comparison to the 1.1 million who play football, and is still far fewer than the 226,285 who play golf or the 290,060 on swimming and diving teams.
Scott said that perception that lacrosse is the next big moneymaker for retailers has given Lax World more competition during a time when retail sales are down. Lax World’s sales this year are down 12 to 15 percent from last year, he said.
“New companies are selling stuff for margins that aren’t sustainable,” he said. “So they go out of business in three years but then another company pops up in their place. So we’re constantly trying to hold our margins and be competitive and sustainable.”
All the more reason to establish itself in new markets, said Harrington. With 20 years in the business and an online presence to serve players and teams nationwide, Lax World has already laid the groundwork.
“This expansion, it’s a way to fortify what you already have,” Harrington said. “It’s almost like protecting your flank.”