"to Roy, who knows the real story." Inscribed on a closing dinner memento, March 1990
The official history of The Sports Authority credits one man with a vision. That version is tidy, and it is easy to retell. Its founding merchant, Roy Cohen, kept the real one, and it is the better lesson in how strategy emerges. The chain that in 1995 became the first full-line sporting goods retailer to pass a billion dollars in annual sales was built far more from judgment than from a plan.
Roy Cohen and I work out at the same gym. We see each other a few times a week, and sometimes we get to talking: jazz, retail, family, strategy and work, in that order. We are both big on Monk. Roy's chocolate Labradoodle is named Jazz. The first time I came by to hear the founding story, Ray Charles was on the speakers, Genius + Soul = Jazz, and the dog kept trying to climb into the conversation.
A few years back Roy told me about the series he wrote in 2011, The Real Story. The title came from a memento he was given at the closing dinner when The Sports Authority sold to Kmart in March 1990. One of his partners, Jory Katlin, had inscribed it "to Roy, who knows the real story." Roy wrote the five posts two decades later because, as he put it, sometimes the real story is more interesting than the myth.
The merchant in the room
Most people who shopped at The Sports Authority knew its scale and never its origin. In 1995 it became the first full-line sporting goods chain to pass a billion dollars in annual sales, and it later became the country's largest full-line sporting goods retailer, with more than four hundred stores at its peak. The format it helped establish, the forty-thousand-square-foot sporting goods superstore, is now familiar across the country. None of that was certain in the founding years, when the company was a room full of people who did not yet know it would work.
Roy was a founding executive, the senior vice president and general merchandise manager. The general merchandise manager is the merchant. The role decides what the stores carry, in what depth, at what price, from which vendors and at what margin, and builds the buying organization that makes those calls every day. In big-box retail, merchandising is the engine. Real estate, operations and finance exist to put the right goods in front of the customer, and the merchant decides what right means.
The founding team was small, and it turned over fast. Jack Smith came in as chief executive and Roy as chief merchant. The first head of operations, Dick Carter, lasted only through the build of the first store. The first head of finance, Chet Howard, lasted a few months past opening, moved to run information technology, and then left. Richard Lynch eventually settled in as chief financial officer and Arnold Sedel as head of store operations, but the original lineup was being recast before the doors opened. A syndicate of venture firms led by William Blair backed the whole thing.
The myth is the one told about almost every company. A founder sees the future, raises the money, executes the plan and wins. In this version Jack Smith conceived a sporting goods empire and willed it into being. The plan the team pitched to investors looked almost nothing like the company that sold to Kmart three years later. A different person was supposed to run it. It had a different name and a different pricing strategy. The things that became iconic were in no plan at all. The real story is what happened between the plan and the company, and that is where the useful lessons are.
The idea for a large-format sporting goods store came from a supplier, well before Jack Smith joined. Jory Katlin, then an executive at Maurice Sporting Goods, one of the largest wholesale distributors in the industry, brought the concept to the venture investor Scott Meadow. Katlin could not run the company himself. A distributor that sold to the whole industry could not also own the chain that would compete with its customers, the same conflict the new store would later have to talk its own suppliers through. So he took a passive seat on the board, and it was Katlin who first contacted Bob Mead as the prospective chief executive. The vision started with a supplier who saw the shift coming and knew he could not be the one to lead it.
Roy's five posts are, to me, a study in emergent strategy, the term Henry Mintzberg and James Waters gave to strategy that emerges from a stream of actions in patterns no one intended at the start (Strategic Management Journal, 1985). Five patterns in his account stand as durable principles:
- You train judgment by owning your misses.
- The plan is the stage, and the strategy is what gets played on it.
- The team is part of the strategy, and the people with the capital decide who leads.
- A strong name commits you to a position the merchandise then has to make true.
- Reinventing a category means hiring the experience you do not have.
Taken together they describe a company composed in the playing, in Roy's words from the blog and from our conversations.
You sharpen judgment by owning your misses
Roy opens the series with a confession. In 1985 a headhunter called him about a chief merchant role at a new chain, and he turned it down without an interview. He could not picture it. Office supplies then meant legal pads, accounting paper, pens and paper clips.
"I couldn't visualize the breadth of assortment that would fill a superstore." Roy Cohen, in conversation
Personal computers existed, but in his mind they belonged in an electronics store, nowhere near the man selling legal pads. The chain was Staples, which became one of the defining superstore successes of the decade. Twelve months later the sporting goods version of the same idea crossed his desk, and he committed inside a day. Two things had changed. Home Depot and Toys R Us had already shown that the category-killer format, the giant single-category store that wins on selection and price, could work, and now Staples was showing it again. The market had handed him the feedback he had lacked the year before, and he had been corrected on a comparable call. He tries never to make the same mistake twice.
Owning the miss also sent Roy back to an idea he already had: start from the customer and build the categories around that customer. Roy had run merchandising at Child World, the castle-fronted toy chain that was then Toys R Us's chief competitor, a business that knew the category-killer format from the inside. There he had worked on a superstore concept that was never built, meant to carry everything for a child beyond toys. The project died. The idea survived.
"I'm not focusing on a particular category. I'm focusing on the customer." Roy Cohen, in conversation
Pointed at sporting goods, that one change designed the store: everything a sports enthusiast, or the parent shopping for one, might want, under a single roof, far beyond a deeper baseball aisle or a wider rack of fishing rods. The format was a pattern taken from a failed project by a merchant who had learned from owning a miss. Pattern recognition is the residue of the misses you were willing to claim, in a field that keeps giving you feedback.
The plan is the stage, and the strategy is what gets played on it
The plan the team took into the investor meeting in Chicago in December 1986 had a chief executive named Bob Mead, a placeholder name, Warehouse of Sports, a promotional pricing strategy built on constant sales events, and a set of financial projections. Almost none of it survived.
The projections did. In Part 5 Roy writes that they projected the first store to do an annualized volume of around $8.7 million, when the average sporting goods retailer did about $1.7 million, and people in the industry thought they had lost their minds. The first store did $10.5 million.
Everything else changed. By 1990 the chief executive was Jack Smith. The name was The Sports Authority. The pricing strategy was everyday fair pricing, steady honest prices in place of a calendar of promotions, which was Roy's position and the opposite of what the plan proposed. The brand's voice was the comedian Louie Anderson. The visual signature was an open ceiling painted blue. None of those choices was in the Chicago plan.
This is what realized strategy looks like up close. The plan that gets a company funded is rarely the strategy it ends up running. The plan is the stage. It puts the players in position and gives the money a reason to be in the room. The strategy is what gets played once the music starts, made through three years of decisions no plan anticipated.
Roy thinks this way because he learned music this way. As a boy he was taught to improvise at the piano by the bandleader who had taught his mother. The man taught him from the chords and the structure and showed him how to find his own way through: here are the tools, now play what feels right. In those lessons the chords stayed fixed, and that structure is what made his freedom at the keyboard possible. Strategy works the same way. Structure comes first, and then the playing.
The team is part of the strategy, and the people with the capital decide who leads
The decisive moment of the founding happened in that Chicago room. The lead investor, Scott Meadow of William Blair, ran it. Roy presented the merchandising plan and sketched the store on a whiteboard: soft goods in the middle, hardlines around the walls, a wide racetrack aisle to keep people moving. The merchandising went well. The numbers went well. Then the proposed chief executive, Bob Mead, stood up to speak.
The way Roy described it to me matches Part 2. It was obvious the moment Mead opened his mouth that he was not a leader. He was old school. He had no concrete ideas beyond repeating what others had said, and when asked a direct question he struggled to answer. The deal died in that room over the man who was supposed to lead it. The investors liked the concept.
What happened next is the part the myth leaves out. Scott Meadow went to work behind the scenes to find the leader the deal needed. Roy described him to me as the one who pulled the right band together, the producer who knew the music was good and went looking for a bandleader who could front it. Meanwhile Roy's involvement had leaked back to his employer, who made a strong counteroffer to keep him. He gave Meadow a deadline of the first of February, and when the deal had not come together by then, he told them he was staying.
It came back to life in March, because Meadow had found his bandleader. Jack Smith had run sporting goods at Herman's and had been chief executive of another retailer in the same corporate family. He was an operator more than a merchant, and the investors believed he had the credibility the round needed. Roy, who had wanted the top job himself, asked why he had not been chosen. The answer, which he reports in Part 3, is a compact lesson in how venture deals work.
"Because this is the guy who can get it financed." The Real Story, Part 3
The capital picked the leader the money could believe in, and that is not always the best merchant. Roy took a deep pay cut, anchored the merchandising himself, and spent three years building the company through steady, productive friction with the man who got the seat he had wanted. At the closing dinner in 1990, the investor and board member Mitt Romney marked the partnership with a backhanded toast, presenting Roy with a pair of heavy-duty knee pads for all the times he had pushed his initiatives through over Jack's objections. The wrong leader kills a sound concept. The right pairing ships, friction and all.
A strong name commits you to a position the merchandise has to make true
The name was an accident that became a strategy. The agency, W.B. Doner, walked in with presentation books titled AllSport, Jack's own placeholder, because they had nothing better. The night before the pitch, one of their creatives had walked past a Port Authority sign at LaGuardia and brought in The Sports Authority as a surprise.
Jack hated it. His objection, as Roy tells it in Part 4, was the cost of putting that many letters on a sign. He came around only after he floated the name to his weekend golf foursome and all three told him it was the best name they had ever heard. Peer validation did what the strategic case could not.
His first reaction priced the sign. The second priced the strategy. Naming is positioning, and positioning, in the sense Al Ries and Jack Trout gave the word, is the act of claiming a distinct place in the customer's mind (Positioning: The Battle for Your Mind, 1981). A name that claims nothing earns no place. AllSport excludes nothing, since every sporting goods retailer could say it sells all sport, so the word commits the company to nothing.
The Sports Authority excludes things. It rules out Sports Amateur, Sports Discounter and Sports Warehouse. Authority is a posture, and a posture is a public promise made before the strategy has been tested. Once that word is over the door, every decision beneath it has to make it true.
For a merchant, the position runs from the sign straight down into the assortment, the product line, the allocation and the pricing. Authority means more depth in each category than a specialty shop, which sets the assortment. It means a line that runs from opening price points to the premium brands a serious athlete respects, which sets the product range. It means the defining brands are on the wall in every store, beyond the flagship, which sets allocation, the decision of how much of each product goes where. And it means prices that look fair and confident, which keeps the store from looking like a discounter. The name wrote a check, and the assortment, line, allocation and price had to cash it.
So Roy built depth no specialty store could match, and he moved the assortment ahead of the culture. He added bicycles, which had lived in specialty shops and which no sporting goods store carried.
"No, a bike is a sport." Roy Cohen, in conversation
Rollerblades and scooters came in as customers began to treat them as sports. He leaned hard into soccer with Umbro just as soccer was arriving in America, and rode the fitness boom when Reebok was the shoe customers asked for. The discipline underneath is knowing when to enter a category and when to leave one, and it is learned by watching the culture as it changes.
Authority also meant choices that cost money. Around 1988, well ahead of the industry, the store stopped carrying assault-style rifles. By Roy's recollection that was close to a fifth of the gun business, given up on purpose. A name that means something forces decisions like that. Saying yes to a position means saying no to revenue that does not fit it.
The clearest test of the principle is the place where the merchandise fell short of the claim. The team never visited Nike. In Part 4 Roy is blunt about it. They did not travel to Nike in Oregon because Nike had only begun to grow and seemed, on the surface, unlikely to be a problem. "Oh, but we were wrong," he writes. As best we understand it, the cost went well beyond a missed introduction. The brand that was about to become the brand was thin on the wall exactly where the Authority claim was loudest, and with it went the co-op advertising support, the money a vendor puts toward a retailer's ads, and the early-partner allocation priority that went to competitors. A name can commit you to a position. Only the merchandise, including the one brand you talked yourself out of chasing, can make it real.
Reinventing a category means hiring the experience you do not have
The myth ends at the strategy. The real story is mostly about building the merchandising organization that ran it.
In the summer of 1987 Roy was working out of an old Radio Shack storefront in a dead mall. As he tells it in Part 5, on the first day his assistant asked where the typewriter was, and there was not one yet. From there, in a matter of weeks, he had to build a buying team, the buying disciplines, the vendor terms, the assortment plan and the pricing, while the computer system was still being installed.
His own depth was hardlines: the bats, balls and tackle. So he built his first team of buyers from four different retail backgrounds, including a department store veteran for the apparel and footwear he knew less well. A team drawn only from sporting goods would have produced more of the same. The category architecture came out of those four sensibilities arguing in one room.
A new format demands more experience than any one person has, so you hire the experience you lack, on purpose, before the shortfall shows up on the shelf. It is the same instinct as casting a band. You hire the players who together can play music none of them could play alone.
The same earned judgment shows up in the small calls, where a resourceful team on a tight budget kept turning concessions into signatures. Anthropology has a word for making do with what is at hand, bricolage, which Claude Lévi-Strauss used for the improviser who builds from whatever the moment provides, and which Karl Weick later brought into the study of how organizations improvise their way to distinctive outcomes under pressure (Organization Science, 1998). The Sports Authority is full of it.
Start with the shopping carts. The store would have them, over Jack's objection that carts were too warehouse. Roy insisted, because the point was to move people through the whole store and let them fill a cart, where a basket invites a shopper to grab one thing and leave.
The open ceiling across the early stores began as a budget choice. From Part 5, the existing ceiling stayed exposed and painted blue because finishing it white would have cost an extra twenty thousand dollars a store. There was no money, so it stayed, and then Roy saw what it could be.
The brand's voice came the same way. The Louie Anderson campaign that defined the chain for years had first been written for John Candy, who proved too expensive. So they cast a then little-known Louie Anderson, who became well known shortly after.
In both cases the budget ruled out the conventional choice, a finished white ceiling or a famous star, and the substitute proved more distinctive than the safe option would have been. The white-ceiling store would have looked like every other sporting goods store. The Candy campaign would have leaned on a familiar face and faded.
The biggest physical departure from the warehouse concept was deliberate, and it was about apparel. A pure warehouse, with goods massed on round racks, would have told the apparel and footwear suppliers that the store was a discounter, and those vendors guard their brands against that. So the apparel area got carpet under proper fashion fixtures. The point was to convince the suppliers, and the customer, that this was also a fashion retailer as well as a bulk seller of hard goods. Softlines were the most profitable part of the business. Winning the brands that filled them required looking like a store worthy of them, which is the same lesson as the name: the position has to be made true in the room as well as claimed on the sign.
That is bricolage, and it is what an experienced eye does with a constraint. The constraint was real. It forced a substitution, and the substitution surfaced an option more distinctive than the obvious one. Before you optimize a budget concession out of the system, ask whether the substitute might be the better answer. A good share of the brand's identity came from substitutes the team first took for bad news.
The music is what you make
Less than three years after the first store opened, with the chain still under a dozen stores, Kmart bought the company for seventy-five million dollars. The projection had come true. Almost nothing else from the original plan had. The plan got the money in the room and the band on the stage. Everything that made the company work was discovered in the playing.
Even the famous projection worked as a dare. Roy had built the $8.7 million figure category by category, knowing the inventory turns he needed and what the big-box operators in other categories had already shown was possible. It was, as he put it, an educated guess and also a requirement, because if the store did not do that volume the model did not work. So they overspent on marketing on purpose, with the investors' blessing, to build the brand fast enough to make the number real. That resembles what Gary Hamel and C. K. Prahalad called strategic intent, an ambition set deliberately beyond current means so the whole organization has to stretch to reach it (Harvard Business Review, 1989).
Ray Charles made Genius + Soul = Jazz by taking standards everyone knew and finding something of his own inside them, the chart in one hand and the freedom to depart from it in the other. That is what Roy did with a company. He had the structure, the merchant's disciplines earned slowly over decades, and he had the nerve to play against it when the moment asked for something the plan did not contain. You can only play like that if you have earned the judgment to know what feels right.
When I asked him where good decisions come from, he answered from experience.
"Judgment comes from experiencing things, from doing things. It's a real-world thing." Roy Cohen, in conversation
That is the part no plan supplies and no shortcut replaces. The myth tells you what was decided. The real story shows you the judgment that did the deciding, and judgment, like jazz, is learned only by playing.
A note on sources. Roy Cohen's five-part series, The Real Story, is the primary source for his account and for quotations attributed to the blog. Quotations attributed to conversation come from interviews the author conducted with Roy in 2026. The November 1987 opening in the Fort Lauderdale area, the March 1990 sale to Kmart for seventy-five million dollars with eight stores open, and the 1995 billion-dollar year come from the International Directory of Company Histories, reprinted by FundingUniverse and Encyclopedia.com.
References. Henry Mintzberg and James A. Waters, "Of Strategies, Deliberate and Emergent," Strategic Management Journal 6, no. 3 (1985): 257 to 272. Gary Hamel and C. K. Prahalad, "Strategic Intent," Harvard Business Review, May to June 1989. Al Ries and Jack Trout, Positioning: The Battle for Your Mind (New York: McGraw-Hill, 1981). Claude Lévi-Strauss, The Savage Mind (Chicago: University of Chicago Press, 1966). Karl E. Weick, "Improvisation as a Mindset for Organizational Analysis," Organization Science 9, no. 5 (1998): 543 to 555.
William Haas Evans
Founder and chief strategy officer of Fugue Strategy Advisors. He works with leadership teams on strategy design, strategic foresight and organization design. More about William
