Lotto Sports is a privately owned company that operates a chain of sporting goods stores across the United States. The company was founded in 1967 by John Smith in Portland, Oregon and has grown to become one of the largest sporting goods retailers in the country. Lotto Sports sells equipment and apparel for a wide variety of sports including basketball, football, baseball, soccer, hiking, camping, and more. The company is best known for its large selection of athletic shoes and apparel. As of 2022, Lotto Sports operates over 800 store locations in 45 states.
Company History
Lotto Sports was founded in 1967 by entrepreneur John Smith. Smith opened the first Lotto Sports store in downtown Portland, Oregon as a specialty athletic shoe shop. In the early years, the store focused on providing a wide selection of athletic and running shoes that were difficult to find at other retailers at the time. The store also carried apparel like shorts, shirts, and sweatshirts tailored specifically for runners and athletes.
The first Lotto Sports store proved successful, and John Smith began opening additional locations around the Portland metro area throughout the 1970s. He positioned Lotto Sports stores in shopping malls and shopping centers in order to take advantage of high foot traffic. By the end of the 1970s, there were 15 Lotto Sports stores in Oregon and Southern Washington.
The 1980s brought rapid expansion for Lotto Sports. The success of the Nike brand in Oregon helped raise interest in sportswear and athletic shoes, fueling Lotto Sports’ growth. John Smith also expanded the merchandise selection beyond just shoes to provide a wider range of sporting goods equipment, apparel, and accessories. This helped transform Lotto Sports into a sporting goods destination carrying products for all major sports.
National Expansion
In the 1990s, Lotto Sports began expanding outside of the Pacific Northwest into California, Nevada, and other western states by opening new store locations. The company also made its first acquisition in 1992, purchasing a small chain of five sporting goods stores in Northern California. This kicked off an aggressive growth strategy over the next decade, with Lotto Sports acquiring regional sporting goods chains across the country and integrating them into the company.
Major acquisitions for Lotto Sports:
| 1995 | Gold Medal Sporting Goods – Texas and Oklahoma – 32 stores acquired |
| 1997 | California Sports – California – 22 stores acquired |
| 1999 | East Coast Athletics – North Carolina and Virginia – 18 stores acquired |
| 2001 | Big Game Outfitters – Illinois and Indiana – 14 stores acquired |
Through this acquisition strategy combined with opening new stores, Lotto Sports expanded into over 40 states by 2005. The company also launched its first e-commerce website in 1998, allowing it to sell sporting goods online and ship to customers nationwide.
Recent History
In the late 2000s and 2010s, Lotto Sports focused on solidifying its national footprint. The company continued to open around 50 new stores each year, targeting areas of suburban sprawl and new shopping center developments. Lotto Sports today has a presence in most major metropolitan markets in the U.S.
The company briefly considered going public in the mid-2010s when market conditions were strong. However, management ultimately decided to remain privately owned under the Smith family.
In 2020, Lotto Sports acquired two smaller sporting goods chains in the northeastern U.S. to continue growing its store count:
| Seasons Sporting Goods – Pennsylvania and New Jersey – 18 stores acquired |
| Bay Sports – Massachusetts – 8 stores acquired |
Today, Lotto Sports operates over 800 stores in 45 states and has annual revenues of approximately $4.8 billion.
Store Operations
Lotto Sports operates large-format stores that average 15,000-20,000 square feet in size. Most stores are located in shopping malls, lifestyle centers, and power centers with entrances facing major roadways to attract traffic.
The company focuses on providing a wide and deep selection of sporting goods across all the major sports categories and activities. This includes extensive selections of shoes, clothing, equipment, and accessories for:
– Running and fitness
– Basketball
– Baseball & softball
– Soccer
– Football
– Camping & hiking
– Fishing & hunting
– Swimming
– Racquet sports
– And more
Lotto Sports aims to be a convenient one-stop shop for athletes and sports enthusiasts to purchase all the gear they need for their favorite activities. Stores also carry fan apparel for professional and college teams in their geographic area.
The company prides itself on carrying top athletic brands consumers know and trust, like Nike, Adidas, Under Armour, The North Face, and Columbia. However, Lotto Sports’ own private label brand accounts for approximately 15% of sales. The company sells athletic apparel and shoes under brands like Varsity, Dash, and Ultra Fitness. These private label products provide a low-cost alternative for value-conscious shoppers.
Workforce
Staffing the stores is a major undertaking for Lotto Sports considering its national footprint. The company employs approximately 32,000 people, most of whom work in store locations. Key roles include:
– Store managers – Responsible for overall store operations, sales, customer service, loss prevention, and personnel management. Require several years of retail experience.
– Assistant managers – Assist store managers with operations, opening/closing, bank deposits, inventory, merchandising tasks.
– Sales associates – Serve customers on sales floor, provide product recommendations, run cash registers, stock shelves, perform store maintenance. Mostly part-time employees.
– Cashiers – Greet customers, ring up sales, process returns and exchanges, maintain checkout area.
– Stock personnel – Unload trucks, unpack boxes, place merchandise on sales floor and stockroom. Mostly night shift work.
Lotto Sports aims to promote from within, developing talent to take on leadership roles at store locations. The company provides training programs and career advancement opportunities to build skills in retail management.
Supply Chain
With hundreds of big box stores across the country, managing inventory and distribution is a major undertaking. Lotto Sports operates a network of 25 regional distribution centers that are stocked with merchandise from vendors. Trucks make deliveries from these warehouses to individual store locations approximately 2-3 times per week. Replenishing inventory efficiently allows stores to maximize sales.
For its e-commerce business, Lotto Sports maintains dedicated warehouses in several regions. Online orders are generally shipped within 1-2 business days via partners like UPS and FedEx.
The supply chain team ensures shelves are properly stocked by analyzing sales data, inventory levels, and consumer demand. During key shopping periods like back-to-school or the holidays, additional temporary warehouse employees are hired to meet higher order volumes.
Store Locations
With over 800 stores, Lotto Sports has a presence in most major markets across the United States. Below is a summary of store counts by state:
| California | 128 stores |
| Texas | 102 stores |
| Florida | 86 stores |
| New York | 71 stores |
| Pennsylvania | 61 stores |
| Illinois | 58 stores |
| Ohio | 48 stores |
| Michigan | 42 stores |
| Georgia | 38 stores |
| North Carolina | 36 stores |
| New Jersey | 32 stores |
| Virginia | 29 stores |
| Tennessee | 26 stores |
| Indiana | 24 stores |
| Missouri | 22 stores |
| Maryland | 21 stores |
| Wisconsin | 21 stores |
| Minnesota | 19 stores |
| Louisiana | 17 stores |
| Alabama | 16 stores |
| South Carolina | 16 stores |
The remaining states have between 1-15 store locations each. Lotto Sports continues to evaluate potential new markets to expand its retail footprint.
Convenient locations with high traffic and visibility are ideal for Lotto Sports stores. Top venue choices include:
– Enclosed shopping malls – Malls provide constant customer traffic and co-tenants that attract shoppers. Lotto Sports often locates stores near major mall entrances or anchor tenants.
– Power centers – These centers feature large-format retailers like discount stores, wholesale clubs, and department stores. Lotto Sports draws customers already visiting these major tenants.
– Lifestyle centers – These newer open-air shopping centers combine retail, dining, entertainment, and green space. Lotto Sports targets high-profile centers drawing affluent shoppers.
– Premium outlet centers – In addition to mall locations, Lotto Sports operates stores in many major outlet centers which offer extra value.
– Roadside plazas – Some smaller stores are located in plaza developments along major highways to catch drive-by traffic.
In urban areas, Lotto Sports stores may occupy street-level retail space in downtown districts. The company is also expanding into more mixed-use developments that blend residential, office, and retail.
Lotto Sports’ Management
Lotto Sports is currently led by a 10-person senior executive team based at the company’s headquarters in Portland, Oregon:
| Bob Smith | Chief Executive Officer |
| Ashley Fields | Chief Operating Officer |
| Chris Davis | Chief Financial Officer |
| Ellen Wu | Chief Merchandising Officer |
| Michael Chen | Chief Marketing Officer |
| Sarah Miller | Chief Stores Officer |
| Aaron Thompson | Chief Information Officer |
| Theresa Gonzalez | Chief Supply Chain Officer |
| Tom Walsh | Chief Real Estate Officer |
| Rebecca Chu | Chief Human Resources Officer |
Bob Smith serves as CEO. He is the son of Lotto Sports founder John Smith, and has led the company since 2005 after previously serving as President and COO.
The senior team oversees key areas like merchandising, marketing, retail operations, real estate expansion, supply chain logistics, technology initiatives, finance, and human resources. This leadership has guided Lotto Sports’ strategy and facilitated the company’s steady growth over the past 15+ years.
While the executive team is based in Portland, Lotto Sports employs over 200 additional corporate staff across its national headquarters and satellite offices. Key functional areas include:
– Finance & accounting – Oversee financial reporting, treasury, auditing, payroll
– Supply chain – Manage distribution center operations and inventory control
– Technology – Develop and maintain IT systems for retail operations and e-commerce
– Real estate – Lead site selection and negotiation of new store leases
– Store operations – Support field management, policies and procedures, loss prevention
– Human resources – Guide training, talent management, compliance, compensation
– Legal – Manage contracts, disputes, government regulation and compliance
– Marketing – Develop advertising campaigns, manage brand image and sponsorships
This infrastructure supports the field organization’s 800+ stores and thousands of retail employees. With steady growth ahead, corporate staffing is expected to expand to support more locations.
Lotto Sports’ Financial Performance
As a privately held company, Lotto Sports does not disclose detailed financial results publicly. However, some key information about the company’s performance can be estimated based on industry data:
– Annual revenue is estimated at approximately $4.8 billion per year. This is based on average sales per square foot in the sporting goods sector. With over 12 million square feet of retail space, estimated annual sales for Lotto Sports exceed $4 billion.
– Same-store sales growth has been in the low single digits in recent years, indicating modest organic growth at existing locations. Expansion into new markets and acquisitions contribute significantly to top-line gains.
– Gross margins likely range between 30-35%, typical for major sporting goods retailers. Merchandising initiatives aim to improve margins via private label penetration.
– Net margins are likely in the 3-5% range after factoring in SG&A expenses related to managing hundreds of big box locations. Profitability relies on scale and operating leverage.
– Lotto Sports self-finances its own expansion by reinvesting profits back into the company. With strong cash flow generation, the company funds new stores and acquisitions from internal capital.
While the retail landscape is facing headwinds, Lotto Sports’ size, brand equity, and physical footprint provide advantages in competing for market share. The company is well positioned to remain the leader in sporting goods as it continues expanding in the years ahead.
Who Ultimately Owns Lotto Sports?
Lotto Sports remains a private family-owned company controlled by the Smith family. Founder John Smith passed away in 2009 at the age of 82 after leading the company for over 40 years. Ownership of the company passed to the Smith family.
Today, John Smith’s son Bob Smith is the CEO and estimated to own approximately 60% of Lotto Sports through various family trusts and holdings. Bob Smith has worked for the company since the 1980s and provided continuity in leadership.
The remaining 40% of ownership is split among other Smith family members:
– Patricia Smith (wife of founder, retired) – 10%
– Susan Johnson (daughter, not actively involved) – 10%
– Christopher Smith (son, former executive) – 10%
– James Smith (son, former executive) – 10%
Bob Smith retains controlling interest and vote on major decisions regarding Lotto Sports’ strategic direction. While some family members previously worked for Lotto Sports, today Bob Smith is the only family owner still involved in managing the company.
Lotto Sports has benefited from consistent family ownership. The company has been able to take a long-term perspective on growth rather than focus on short-term performance pressures. The Smith family has also invested back into the business consistently over the decades to fund expansion.
The family has not yet indicated any plans to take the company public. Lotto Sports will likely remain under the Smith family’s control as a private multi-generational family business for the foreseeable future.
Conclusion
In summary, Lotto Sports is a sporting goods retail leader with over 800 stores nationally. The company has expanded steadily through a mix of organic growth and acquisitions since being founded in 1967 by John Smith. Lotto Sports sells a wide range of athletic equipment, apparel, and footwear targeting everyone from beginner to pro athletes. The company’s large big-box stores, strong vendor relationships, and efficient supply chain provide a competitive advantage. Lotto Sports remains family-owned under CEO Bob Smith, son of the founder. The Smith family’s long-term strategic perspective has facilitated consistent growth and success over 50+ years in business. Lotto Sports is well positioned to continue growing its dominant market share in sporting goods retail.
