John Forzani founded a sporting goods store called Forzani’s Locker Room in Calgary in 1974 with his two brothers and a friend. The burly entrepreneur continued to play professional football with the Calgary Stampeders even as he ran the store, but eventually gave up professional sports to focus on his business full-time two years later. Over the next three decades, Forzani grew the company into a national chain that now includes the Sport Chek, Sport Mart, and Athletes World brands in its portfolio. Yesterday, Canadian Tire purchased the Forzani Group for $771-million. Forzani spoke to Canadian Business about his decision to sell the company.
What did you think when you got the offer from Canadian Tire?
In the last five to ten years, we’ve had a number of inquiries. Some you could tell fairly quickly were fishing expeditions and some had more substance. As a matter of fact, we had very serious interest in 2007 from a financial investor, but that ended when markets went to hell in a hand basket. I’m not trying to say these happened daily, but certainly we’d get a phone call probably quarterly. My mindset as chairman is to look after the best of shareholders. And shareholders would want us to explore this.
Why was the timing right to sell?
We did not have any concept of selling the company. That was not in the game plan. There was a very strong business plan that we just approved in January, a new three-year plan that would have seen more growth and more profitability for the company. So I don’t know if the timing is ever right or wrong; the price is right. When it reaches a certain premium, you really can’t dismiss it. And so we ended up with a 50% premium, or something close to it. I have no regrets, just nostalgia. This transaction is exactly the right thing for the company, and probably the exact thing for the Tire. When I first started, my competitors were only in Calgary. Today in retail, your competitors are around the world. There are no little 20-store chains any more. They’re all gone. You see these big, big chains that can afford the infrastructure that allows them to be price competitive on a worldwide basis. That’s why I think it was a really good deal for our stores to belong to a group as sophisticated as Canadian Tire.
What’s this like for you personally?
Yeah, that’s a different matter, when it’s something you started a hundred thousand years ago on a shoestring, and then it grows into a much bigger company. But we’ve been public since 1993, and I long ago wrestled with the idea of a family business versus a corporation. It’s still an emotional issue, and it’s a bit of a sad thing for me. Not the transaction, but the fact that the day comes when you move on. I actually live near where my first store was just south of downtown Calgary. Now it’s a Thai sub store. Thai subs? It doesn’t make sense to me, but the guy’s been in business for years now so it must be good. But it’s just interesting to look back at how you started.
Will you have any role with Canadian Tire?
We haven’t really discussed it, but my answer is probably not. I’ve done my lifetime quota of 100-hour weeks. I have a couple of little board things, and a couple of little investments, but I do know I have an intense desire not to get ass-deep in the day-to-day running of anything. That is for sure.