Courting the granola - and gun - crowds

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Tony Mignacca is bragging about the selection at his Sail outdoor superstore in Ottawa.

Looking out over the 50,000-square-foot main level – more than twice the size of the local Mountain Equipment Co-op store – during a store tour in mid-January, he points to 1,500 pairs of snowshoes, 40 canoes and kayaks stacked to the ceiling, hundreds of camp mattresses and backpacks and dozens of racks of athletic wear. In the summer, 60 tents are assembled on the floor. At the moment, much of the merchandise is on sale.

"There is absolutely no outdoor competitor that has the mix and depth that we have," he says.

But there's one thing the president of Laval, Que.-based Sail Outdoors Inc. doesn't want the sporty outdoors set to see when they walk in – the guns.

Upstairs, tucked out of sight from the main level, is a wall of 200 guns and a dozen crossbows, as well as decoys, camouflage, salt licks and bottled moose urine – under a row of trophy heads. The other half of the 20,000-square-foot second floor sells thousands of fishing reels, rods and lures.

"Our research showed us in the past that not necessarily every consumer who's an outdoor enthusiast feels comfortable in an environment where there are firearms on the wall, and that hunters want their own corner," Mr. Mignacca says.

Sail has attracted droves of outdoors enthusiasts in its home province by catering to both ends of the market – the granola and the guns crowds. A Leger Marketing survey found that Sail is the most popular outdoor sports retailer in Quebec, where it operates four superstores. For shoppers, Sail "has this pilgrimage aspect to it," said Christian Bourque, executive vice-president with Leger.

Now Sail has Ontario in its sights. It has declared war on the province's outdoors specialty retail market, launching a full-out assault to grab market share in a growing but increasingly competitive market that features such giants as U.S.-based Bass Pro Shops, Canadian Tire Corp. Ltd. (which last year bought Forzani Group, parent of the 65-store Atmosphere chain) and the expanding B.C.-based Mountain Equipment Co-op chain.

There have been casualties. When Sail opened its first Ontario store near the Ottawa train station on Dec. 1, 2010, "We jokingly referred to it as 'shock and awe,' " says Bob Laughton, owner of local outdoor sports retailer Bushtukah. Up against Sail's splashy promotions and opening-month discounts, Bushtukah sales fell 10 per cent to 15 per cent that month.

In late November, Sail opened in Oshawa and Vaughan to similar effect. "They destroyed our clothing business," said Keith Danielsen, owner of the 40-year-old Mount Kirby Skis and Boards in Oshawa.

Mount Kirby's ski wear sales were down 80 per cent in December, year-over-year, as Sail "absolutely flooded" the market with ski jackets at discounted prices, Mr. Danielsen says. "It would have taken me five years to sell that amount of clothes. This will be an industry killer."

Now, Sail is set to open two more Ontario outlets this year – in Burlington and near Toronto's Sherway Gardens – and after that is planning another two stores in the Greater Toronto Area.

"They are aggressive … and they will be feisty competitors," said David Russell, president and chief executive officer of Toronto-based Sporting Life Inc., which has a store at Sherway Gardens. (Toronto insurance company Fairfax Financial Holdings Inc. acquired 75 per cent of Sporting Life in December.)

Mr. Mignacca doesn't mind the response – he has come to expect it. "Competitors tend to freak out when we arrive, then everybody finds their space and life goes on," he says.

Dressed in black slacks, sweater and dress shoes, the heavyset, gum-chewing 52-year-old Mr. Mignacca doesn't seem the outdoors type. He hasn't camped in decades and doesn't climb mountains or cross-country ski. He does fish. "We didn't get into this because we sold the products we consumed, but because we thought there was an opportunity," he says.

The son of a Montreal grocer, Mr. Mignacca started in retail early and became president of Sports Experts at 33. Spurned in his efforts to lead a management buyout before the chain's owner sold to Forzani Group in 1994, he and two co-workers set out on their own, buying and later selling a Montreal ski retailer before becoming interested in the broader outdoor goods market.

"We thought it had huge potential," he recalls. "The whole back-to-nature movement was coming into vogue."

The partners bought Baron, a modest-sized hunting and fishing store in Montreal in 2000. After scouting trips to the United States, they felt a megastore concept could work in Canada.

That led them to buy Sail, a former army surplus store that by 2005 had transformed into a hunting, fishing and camping superstore on Montreal's south shore. With the backing of Quebec labour-sponsored venture fund Fonds de solidarité FTQ, and their own expertise in retail, Mr. Mignacca and his partners added premium outerwear brands such as Canada Goose, Descente and Arc'teryx.

They decided to dominate any category they sold, hiring specialists as salespeople in each: experienced campers for the camping section, derby winners for the fishing section, and experienced hunters who can install rifle scopes.

Mr. Mignacca says Sail should ring up more than $150-million in sales this year, adding that the Ottawa store has been "an absolute home run."

Business in the GTA has been slower due to the lack of snow, but "we'll know much more during April to July" when buyers come out for the camping, hunting and fishing seasons. "I don't see any reason why we shouldn't have the same success in the GTA," he notes.

His rivals suspect Mr. Mignacca is positioning Sail to sell to a larger group – something he doesn't rule out – but for now he is focused on expansion. "There's a lot of potential. I think the next 10 years will be a hell of a ride."