There's little confusion among consumers between Sport Chalet and Big 5 Sporting Goods.

Sport Chalet outlets are often located in malls and offer premium sporting goods for generally premium prices. Big 5 stores are small, crammed with discounted merchandise and famously feature $19 sneaker blowouts.

Investors apparently aren't confused either though not in the way one might suspect.

Shares of El Segundo-based Big 5 Sporting Goods Corp. are down more than 60 percent since the beginning of last year, trading around $5 and reflecting the woes of retailers amid the sharp downturn in consumer spending. But shares of Sport Chalet Inc. have nearly evaporated.

Shares of the La Canada Flintridge-based retailer's Class B common stock closed at 75 cents on Jan. 15, a stunning 91 percent fall since the beginning of last year. That's the kind of decline more associated with a company heading toward bankruptcy rather than Sport Chalet, which saw its sales fall only 1.2 percent to $96.5 million in its fiscal 2009 second quarter ended Sept. 28.

Part of the issue with Sport Chalet is that it is a micro cap with very little liquidity. Insiders own 69 percent of its Class B common shares, and on any given trading day only a few thousand shares change hands its market cap didn't break $11 million last week.

By contrast, Big 5's market cap was around $144 million with more than 150,000 shares trading hands.

But the bigger issue appears to be where the companies are positioned in what has become a virtually unprecedented retail environment. In short, cheaper these days is where it's at.

"Big 5 carries a lot of the same brands as Sport Chalet, but they're lower-end products from those brands," said Jeff Mintz, an analyst with Wedbush Morgan Securities in Los Angeles. "Big 5 also does a lot of sales through weekly circulars, and customers are likely to trade down in this tough environment."

Even so, Big 5's fourth-quarter sales were down 5 percent to about $220 million compared to the same period in 2007, and same-store sales declined 8.6 percent. Product selling margins were down 0.5 percent as stores continued to discount merchandise. Sport Chalet has yet to release comparable results.

Complicating the comparison is the fact that in the prior quarter ended Sept. 28, Big 5 reported a decrease in sales of 3.5 percent, almost three times the decline of Sport Chalet. However, Mintz said that the figures are deceptive, with same-store sales off nearly the same at both stores for the quarter.


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