Action oriented: Steve Zabarsky, owner of Valley Play it Again Sports locations, finds the right game plan to turn around neighborhood business.

It took Steve Zabarsky four finance and investment jobs to realize that the corporate life didn't suit him.

Still, when the opportunity to acquire a Play it Again Sports store came up, Zabarsky thought it would be only a temporary stopping point.

That was more than five years ago.

Since then, Zabarsky has acquired three of the franchises, turning one around and selling it, and building the other two to a combined $1.2 million in revenues.

"There's no mystery to this," said Zabarsky. "It's doing the things that people want.

Zabarsky's two Play It Again Sports stores, in Northridge and Studio City, sell sports and fitness equipment--everything from golf clubs to hockey, tennis and surfing gear, baseball equipment, treadmills, stationary bikes, roller blades and an assortment of cleats and other sports shoes, roller blades and more.

The stores sell new and used merchandise, the latter culled from customers who trade in their older equipment in return for discounts on upgrades.

The stores are part of a 500-store franchise operation that provides each owner with buying clout as well as product information, training materials and other consulting services in return for royalties from sales.

Zabarsky, a self-described "sports nut," first became involved in the operation when his brother became a partner in the Northridge store and asked Zabarsky, whose background includes consulting to businesses in bankruptcy, to help turn around the store's ailing fortunes.

"The way they did things was very mom-and-pop-ish," said Zabarsky. "I felt there was an opportunity with my experience to make things more efficient and more focused."

Borrowing money from his family, Zabarsky bought into the store in 2000 for a nominal sum that amounted to a discounted value on the existing inventory.

"I thought I was going to do it for a little while and then find something else," he said.

The store, operating on a 40 percent margin, about 10 percentage points below the industry standard, was losing money. A full complement of staff was often scheduled to work at non-peak hours and the inventory was poorly organized.

"In retail you're going to have your hits and misses, but it's a question of recognizing the hits and misses quickly," said Zabarsky. "If you're inefficient, these things aren't happening."

Zabarsky revised the merchandise assortment and the displays, added some operational procedures and, though revenues decreased, he brought the store back into the black.

Year-round enthusiasts

Meanwhile, he had seen a Play It Again Sports in Manhattan Beach that he felt was missing out on the area's captive audience--year round sports enthusiasts--who are inclined to buy locally provided a store can service their needs.

"When you have an underperforming store, normally it's because they're off the path," said Joe Wagner, regional operations manager for Winmark Corp., the parent for Play It Again and other retail franchises. "With Steve, he had a particular energy level that he brought to the store. He saw changes in product mix that needed to occur and he dealt with people in a really good way. Thos are the things that you really address in retail."

The store's inventory was extremely low and what it did carry was not suited to the shoppers in the area. It was just the turnaround opportunity Zabarsky was seeking.

"The first thing we did was shut the doors for a week," he said. "We took everything out, painted, installed new carpets, built a store room and added inventory. The first month we tripled the sales."

The store was running well, but Zabarsky found that he and his wife were operating the two stores 40 miles apart. He realized he could gain synergies with stores that were closer in proximity, so when the Studio City store became available, he jumped at the chance to buy it.

"I used to be amazed at how they could do the numbers they did with the merchandising the way it was," Zabarsky said. "I saw so much potential. I really wanted the store. The question was how to finance it, so I said, let's flip Manhattan Beach."

Store revisions

Zabarsky acquired the Studio City location in December, 2003, adding new signage, organizing the different types of sports equipment into their own sections of the store and revising the pricing on the used merchandise. He also put in new lighting and carpeting, and he relocated the service counter to the front of the store from its previous location in the middle of the shop.

This month he also moved his Northridge store to a new location Zabarsky feels provides better traffic and visibility.

When he owned the Manhattan Beach store, Zabarsky had to employ about five sales people in each location. But with the two locations now in Northridge and Studio City, he can operate with a total of six sales people, shifting them between stores as necessary. He can also transfer inventory easily between the stores.

"In November 2003 (under the former owners), they did in the mid-$20,000 range. We went from that to the low $50,000 range," Zabarsky said, referring to the Studio City stores monthly range. "Then in March, we ended up having the best month ever, and I've never looked back."

Spotlight

Play It Again Sports

Studio City and Northridge

Northridge revenues in 2000:$650,000

Northridge revenues in 2005:$500,000

Northridge employees in 2000:7

Studio City revenues in 2003:mid-$400,000 range

Studio City revenues in 2005:$700,000

Studio City employees in 2003:7

Combined employees in 2005:6

Goal: To grow the stores in an intelligent fashion

SHELLY GARCIA

Senior Reporter