FIRST TEAM SPORTS, INC.
In February 28,1998, John Egret, the president and CEO of the Company was very
disappointed with the results of his company’s 1997 operation and was wondering about
the future of the Company. He remembered about his message to its board of directors at
the end of 1996 fiscal year and how he thought his company would perform in 1997.
According to him, 1997should have been another year of growth for the company for the
following reasons:
There is opportunity for continued industry growth as the number of in-line skaters
continues to increase.
Worldwide markets continue to expand.
There has been strong acceptance of new product lines.
The average selling prices will most likely increase due to the mix of higher-priced
products and the fact that many experienced skaters are beginning to upgrade.
There is ongoing emergence of new niches and sports. The National In-Line Hockey
Association predicts that participation in roller hockey will triple that of ice hockey by the
year 2000.
The company has deepened its penetration to specialty stores and the mass-merchant
market continues to grow.
New competition will lead to more product promotion resulting in more visibility and
awareness for in-line skating.
At the end of 1997, however, the sweet story that he told his board members had begun to
sour as the company sales dropped and debt level started to rise. In 1996, the company
invested over $7.8 million in fixed assets and borrowed over $3 million in long-term debt.
However the company paid off over $4 million of its short-term debt by issuing equity in
the market.
Founded in 1986
First Team Sports was founded in 1986 by John Egart and David Soderquist. A year earlier,
both men were toiling as Minneapolis-area sales representatives for foreign companies in
the sporting goods business–Egart for German athletic shoe giant Adidas, Soderquist for
Amer Sport, a Finnish hockey skate manufacturer. In the course of their travels among
sporting goods stores, the pair began to notice the appearance of a new type of roller skate.
The new skates were of the in-line variety and were being made by a young Minneapolis
company called Rollerblade, Inc. Rollerblade was actually reintroducing a type of skate
that had been popular briefly in the 1860s.
Company’s Performance in 1995-1996
First Team Sports, Inc. was a worldwide leader in the rapidly growing market for in-line
skates and related products in 1995. Its worldwide sales grew at 140% in 1995, but its
sales growth dropped to 14% in 1996.
