When investment firm CriticalPoint Capital acquired retailers JackRabbit, Olympia Sports, and Shoes.com during the past several years, the goal was to start a “family of brands” focused on footwear and apparel.
It didn’t take long for that family to fall apart.
Last fall, rival Fleet Feet bought Colorado-based JackRabbit and its roughly 50 running specialty stores from affiliates of CriticalPoint, which operated these retailers under the Running Specialty Group (RSG) banner. Then, this spring, RSG sold the domain names for Boston-born Shoes.com, also known as Shoebuy.com, to Designer Brands, aka DSW.
Now comes the end for Olympia: Going-out-of-business sales at its 35 remaining stores — 10 in Massachusetts — are set to wrap up on Sept. 30. A final, painful farewell for what was once a regional powerhouse just a decade ago — with roughly 230 locations across the Northeast under the Manganello family’s ownership. The closing will eliminate more than 300 jobs, mostly at the retail stores, and end a convenient solution for many parents who needed to outfit their kids quickly before a new sports season.
Mark Coffey, presumably the last CEO of Maine-based Olympia, provided details about the group’s sudden resignation via a filing in the US Bankruptcy Court in Delaware this week.
Coffey blames the aftereffects of a slowdown during the early days of the pandemic and an onerous e-commerce software contract with Salesforce that didn’t deliver as expected.
RSG’s leadership already pared back the size of Olympia considerably in 2019, by deciding to acquire just 75 of Olympia’s then-150 store locations. (The others simply closed down.) Olympia’s revenue in 2020 hit $50 million before rebounding to $74 million in 2021. The sporting goods seller, which Ed Manganello started in 1975 in Portland, was not yet breaking even again, but it was getting close.
One critical setback for Olympia occurred when RSG acquired Shoebuy.com (aka Shoes.com) from Walmart in 2020. The 20-year-old company was one of the first online sellers of footwear. But by 2019, it was badly bleeding money. The executives at RSG believed that those losses related to Shoebuy’s internal online platform, which required a large number of personnel to run it. They thought that Shoebuy “would become extremely profitable,” Coffey said, by switching to a more efficient e-commerce platform.
In April 2021, according to Coffey’s retelling, RSG entered into a contract with Salesforce for “an extensive (and expensive) ecommerce package” for RSG’s online businesses. But Salesforce’s order management system didn’t quite work as expected, Coffey said, and many orders were botched. Shoebuy’s sales plunged. RSG then needed to spend “substantial funds” to fix these software problems and create workarounds. Meanwhile, Olympia still struggled to recover from a pandemic-related slowdown in sales and orders the previous year. It didn’t help that Olympia’s business is largely seasonal, with a heavy dependence on back-to-school and holiday sales.
Late last year, RSG decided to sell JackRabbit, which was still successful and cash-flow positive, to Fleet Feet. RSG tried to renegotiate its contract with Salesforce to account for the loss of JackRabbit’s activity, but was unsuccessful. Shoebuy never recovered from the switchover to the Salesforce software, and RSG sold Shoebuy’s domain names and inventory in the spring to stop the losses and help pay down a significant loan.
Many of the liabilities of JackRabbit and Shoebuy remained with RSG after these sales. In April, Olympia hired a restructuring firm that determined maintaining all 63 remaining Olympia stores was not feasible, and then shuttered a number of stores almost immediately. In July, Olympia decided to close all of its remaining locations.
After being a part of New Englanders’ lives for nearly five decades, the Maine-based retailer will soon be but a memory.
Jon Chesto can be reached at email@example.com. Follow him on Twitter @jonchesto.