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Craig Levra: Changing Gear

Craig Levra wanted a window at the far end of his office, but when he learned it would cost $20,000, he quickly opted for a white board instead. It’s an apt symbol of his penchant for pragmatism and financial prudence, qualities that have helped him navigate the last two years at Sport Chalet. The high-end retailer of recreational gear has not reported a quarterly profit since 2007, but Levra believes the worst is over. The chain, with 55 stores, has long been a pioneer in sports retailing, whether it’s by selling a pair of $1,200 ski boots or offering in-store scuba instruction. Levra, 52, now owns about 6 percent of the company’s shares, with 55 percent controlled by the founding Olberz family. The remaining shares are thinly traded on Nasdaq. Levra met with the Business Journal in Sport Chalet headquarters in La Cañada-Flintridge, across a parking lot from the original store in the chain. He discussed how he first got into sports retailing as a college entrepreneur, the special challenges of taking over management from a company’s founder and his new pastime of ice climbing.

Question: What sports does the CEO of Sports Chalet do?

Answer: I spend time with my children, but luckily they like the same activities I do: downhill mountain biking, skiing, snowboarding and hiking. This year I took up ice climbing – they aren’t doing that.

Is it as cold and scary as it looks?

It’s a thrilling sport. That photo on my wall is at Lee Vining Canyon, a frozen waterfall north of Mammoth. You top-rope it so you go straight up. It’s fairly safe.

What would you consider a dangerous climb?

We did North Peak in Yosemite in September. That’s free climbing, 160 feet straight up. You’re tethered to the other climbers, but at 160 feet you can’t become unstuck. It was unbelievably difficult, but man did we have fun.

What is the equipment?

Crampons and ice picks. You don’t want to become “unstuck” – that’s what they call it. Do not become unstuck from the ice! That climb was no harder than dealing with banks the last few years, and a whole lot more fun.

What do you like best about your job?

It’s an absolute dream job. It’s so much fun. The best part is all the great people you get to meet, starting with the 3,000 sports experts who work in our stores.

Do you get to meet celebrity athletes?

I meet fewer than you would think. We have a rule here: If you’re invited to go to a game, you must be there on business. We don’t just hop on a plane to the Super Bowl in Miami. That’s just wrong.

What is your favorite piece of sports memorabilia?

A personalized Marucci bat. This company was started by the trainer at Louisiana State University who figured out a better way to make bats. We’re the only retailer that carries them.

Do you ever swing it?

No. You can tell it hasn’t gotten a lot of use.

Any other pieces?

For our annual report in 2005, we sent a note to Jeanie Buss saying we wanted a design for the cover showing a triangle play. We sent her a diagram of a triangle offense. She sent back three copies signed by Tex Winters, a Lakers coach who developed the triangle offense, and Phil Jackson.

How would you describe the company’s founder, Norbert Olberz?

He is a visionary. He did Rollerblades before there were Rollerblades. He was the first importer of Ugg boots into the United States; got us into the scuba business at a time when no retailers would go there.

What was it like taking over a business from the founder?

People were taking bets how long I would last because Norbert was cycling through executives pretty fast.

Did you know about this when you arrived here?

I had done homework. The previous guy said that on the 67th day of his tenure, he walked into Norbert’s office and quit. If you ask Norbert, he was fired. So on my 68th day, I got some nice flowers and a card from Norbert and Irene. It said, “At least you lasted longer than the last guy.”

How did you interpret that?

I didn’t know him well then, but now I realize he has quite a sense of humor.

So how did you get to know him?

He grew up in the Depression. My second week on the job, I came in and there was trash on my desk. It was the trash I had thrown in my wastebasket the night before. He said, “Look at all that paper you wasted. You didn’t write on the back side.” And he was not kidding.

What else?

One year he decided we should wear these yellow nylon sailing vests. I said, “We aren’t wearing those stupid yellow vests.” He hit the table said “Oh, yes we are.” I realized then who the boss was.

So what happened?

Everybody wore the vests. They were hot, sweaty – just nasty. During the summer he went to Europe. He called and asked me, “Are you guys wearing those vests?” I said, “Absolutely.” He didn’t believe me, so I offered to send him a picture. I had already decided that if store employees had to wear the vests, so did management. So I got everybody from the office together and took this picture. I sent it to Switzerland by Federal Express.

Did that satisfy him?

He called and yelled at me for spending the money on Federal Express.

How come you stopped wearing the vests?

We eventually stopped selling those vests. Years later, we had one framed for a holiday party and gave it to him. At the bottom it said, “I Am Still the Boss.” He laughed about it – he was a good sport, we could rip him about it.

How did you resolve your differences?

He is German, and he used to tell me all these German sayings. I’m of Italian heritage, so one day I told him a saying from Italy: If you have two men in a room who both think alike, you don’t need one of them. I said, “If you want me to say yes to everything you decide, you don’t need me. You have to let me try something.”

How did he react?

He started to open up and say OK to some ideas. I never went against his wishes. Never. I thought about it, but at the end of the day he’s the boss.

Where is he now?

He still lives in La Cañada-Flintridge. He’s 84 years old and retired, and he still stops by once in a while.

Was there anything in your childhood that prepared you for this job?

Yes, my dad was a football coach.

Did you play sports?

I played high school football and was really bad. I was probably the worst player on the field.

What position?

“Wayback.” A little bit of linebacker and special teams mostly. I was a very bad football player.

Where did you grow up?

All over the country. I was born in Kansas, then went to New Mexico, Texas, then back to the University of Kansas.

What prepared you for this job?

Just being around sports. Watching my dad work with the coaches around him. You learn how to behave when you are winning and how to behave when you are losing.

How does that apply to business?

We have lost a lot lately. People pick on Phil Jackson, saying he has these great players and that’s why he won all those championships. That’s bogus baloney. There’s an art to managing winning. You have to be tougher when you’re winning, because people take it for granted. When you’re not doing well, you don’t have to remind people. Everyone knows they have to do better.

Did you work during college?

When I went to school at the University of Kansas, my family didn’t have a lot of money so I worked three jobs. I was the equipment manager for the football team; that gave me meals at the training table and some cash. Two roommates and I managed an apartment complex. That gave me a place to live.

What was the third business?

When we went on the road for football games, we had a chance to visit the bookstores at other universities. They had really cool merchandise for their teams. At the time, the University of Kansas bookstore wasn’t up to speed. I thought, we can do this.

How did you do it?

We called manufacturers, signed agreements. We sold shirts, sweaters and jackets out of the trunk of my Oldsmobile.

Who were the buyers?

Players. We sold them after football practice. Players want a gift for their girlfriend? We had it. Something for mom and dad? We had it. It was really cool.

How come you got out of that business?

The NCAA took our designs. That was before Collegiate Licensing Corp. Now it’s all very regulated and controlled. But we got what we were going to get.

What were your first jobs after college?

I worked for some startup companies. Most of them aren’t around anymore, but it was great training.

Any recognizable names?

Home Club, a competitor to Home Depot. Then All-American Sports Club. We got to eight stores before filing for bankruptcy.

And after that?

I got a job at Sports Authority as a buyer for camping and water sports. I spent five and half years there. The company was on a growth path, so I moved up each year there. Before coming to Sport Chalet, I was vice president of store operations for Sports Authority.

What was the turning point of your career?

Coming to Sport Chalet. I had a great job at Sports Authority – 168 stores, growing well. I came to Sport Chalet with 18 stores. It was a huge risk.

What was your most difficult decision?

Most people in this position would agree, it’s letting people go. When our business hit the wall at the end of 2008, we had to take some costs out of the business. We said goodbye to people who had done nothing wrong.

How many?

Ten percent of our work force of 4,300. We shed a lot of tears over that one.

Who has influenced you?

I have a sister in Kansas City. She’s in retail as well, running stores for the non-profit Habitat for Humanity. She’s a hero of mine.

Any sports figures?

Paul “Bear” Bryant. If you read “The Junction Boys,” when he got to Texas A&M, they practiced out in the dirt fields. They were supposed to have this nice field for fall practice, but they got this rock field with broken beer bottles and no bathrooms. He turned that program around and produced championship football teams. Stories about people who can motivate people and turn things around and get wins – that’s powerful.

Do you ever wish your company were private instead of trading on the Nasdaq?

We enjoy being a public company. A lot of people think it must be a pain – all these rules and Sarbanes-Oxley compliance, the SEC and Nasdaq. But sports are all about keeping score. It makes our company very open and transparent. All this helps make us better.

What do you see in the future?

This marketplace may not get better for five years. So we have a plan that says the market never gets better – ever; but we get better.

Did you foresee the recession?

In 2007, the mortgage default rate went from one-tenth of 1 percent to one-quarter of 1 percent. We spotted that in the Moreno Valley. We were ready to sign a lease for a store. I was standing on a hill above the 60 Freeway with our real estate broker, looking at two sites, and I said, “This feels like 1990, when the housing bubble broke. Let’s pass on this.” But I never dreamed it would get like this.

Craig Levra

TITLE: Chief Executive

COMPANY: Sport Chalet Inc.

BORN: Pittsburg, Kan.; 1958.

EDUCATION: B.A., liberal arts; M.B.A., both from University of Kansas.

CAREER TURNING POINTS: Hired as chief operating officer at Sport Chalet in 1997; became CEO in 1999.

MOST INFLUENTIAL PEOPLE: Norbert and Irene Olberz, the founders of Sport Chalet.

PERSONAL: Lives in La Cañada-Flintridge with his wife, Robin, 16-year-old twins, a boy and a girl. “As we say in retail, buy one, get one free.”

HOBBIES: Mountain biking, skiing, hiking and ice climbing.

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