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Sporting Life is betting that, even in a shaky economy, its customers will continue to shell out $2,300 for a Vist parka or $530 for ski goggles with GPS.Peter Power/The Globe and Mail

Before Vancouver-based yoga phenomenon Lululemon Athletica Inc. arrived on the retail scene, another merchant was blazing trails in high-end "fashletics."

Sporting Life marries sporty chic with athletic goods, dressing its well-heeled customers for the ski slopes or Starbucks while equipping them with high-tech skis, goggles and tennis racquets. Now, during the critical holiday sales season, Sporting Life has taken a big step along the road to a cross-Canada expansion beyond its Ontario base, adding 40 per cent more space to its landmark flagship in Toronto as rivals rush into the market.

Sporting Life is betting that, even in a shaky economy, its customers will continue to shell out $2,300 for a Vist parka or $530 for ski goggles with GPS. At the same time, it faces burgeoning competition, partly from its own suppliers such as ski specialist Salomon, which are rapidly setting up their own shops.

"Increasingly we're competing with our vendors," said David Russell, co-founder and president of Sporting Life. "And we're competing with well-financed national competitors, like Sport Chek. We're going to have competition from all kinds of people. … It's not a piece of cake."

Sporting Life today is at a crossroads, feeling the urgency to look for a suitor or investor – even possibly go public eventually – to help rev up its business for a transforming retail field. It would be following a well-worn path taken by another up-market chain, Lululemon. In 2005, two private equity firms spent $108-million to buy an almost 48-per-cent stake in the purveyor of yoga wear before it went public two years later. Now at a turning point, Sporting Life is far from alone among domestic retailers that are mapping out dramatic new strategies to ensure they can withstand the changes sweeping through the retail field.

Even so, Sporting Life is also moving forward by dipping into its past. That means being vigilant about knowing what products to stock for its customers– for instance, it was among the first in North America to carry the popular Canada Goose parkas. It means sticking to select areas like skiing, snowboarding, tennis and biking. And it means treating customers like royalty. Case in point: Several years ago, it allowed one to return a toaster even though the retailer never stocked toasters.

"It's the Holt Renfrew of the sporting goods world," said Scott Lumsden, a business director at Salomon Canada, which now has two of its own stores here, and is a key supplier to Sporting Life. "They have a solid team of product buyers as well as the owners who have such a keen eye for what the market is looking for. They pick up on the trends. But it's becoming more and more difficult with the competitive base you've got."

Beyond taking on suppliers such as Salomon, North Face and Nike that are launching their own flagships, Sporting Life faces a big-box threat from sporting goods chain Sport Chek, whose parent was snapped up in the summer by retail giant Canadian Tire Corp. And new foreign powerhouses, including U.S. upscale department-store chain Nordstrom, are hunting for store sites here, raising the stakes for everyone.

"There's only so much space in the Canadian marketplace," said Tom Quinn, former president of Forzani Group, the country's largest sporting goods retailer, which includes Sport Chek. "Canadian Tire has aggressive plans with Sport Chek. But Sporting Life is a very good retailer."

With under $100-million of annual sales – up 10 per cent in 2010 from a year earlier, its owners say – Sporting Life generates less than one-tenth the revenue of Forzani, in an estimated $8-billion-a-year Canadian sporting goods and apparel sector. Still, Sporting Life is banking on its affluent customers, who have recovered faster from the recession than their lower-income counterparts, continuing to head to its stores.

At the heart of Sporting Life are its three owners, Mr. Russell, 57, his wife Patti, 57, and Brian McGrath, 72, (a physician by profession), who founded the company more than three decades ago. Each has a hand in picking merchandise: Mr. Russell, sports equipment; Ms. Russell, fashion; and Mr. McGrath, footwear. They understand their customers because "we are our customers," Mr. Russell said. Members of a private ski club, they glide down the same hills and work out at the same gyms as their shoppers.

But their product choices go beyond keeping tabs on their social circle's preferences in goggles and après-ski outfits. They travel regularly to trade and fashion shows with their employees – one third of its 270 full-time staff (among 600 employees in all) have worked 10 years or longer there – scoping out the latest global trends.

Sporting Life tries to be ahead of the trends, but occasionally the strategy backfires. Mr. McGrath recalls stocking Uggs boots more than a decade ago, years before they became hot. By the time they started to catch on, the chain stopped carrying them, although promptly restocked them in 2004. "We were too far in advance."

Corey Stecker, marketing director at supplier North Face, said Sporting Life's fashion buying team, along with Ms. Russell, is an intense group that arrives at the vendor's showroom twice a year to pore over styles for the next season. While other retailers take just a day to make merchandise decisions, the Sporting Life team takes four or five. "They literally take over the showroom."

Still, fashion, which represents about half of sales today, is critical to Sporting Life because apparel's profit margins can be 10 per cent higher than those of sports equipment.

But the field is getting crowded. Canada Goose now is carried at posh rivals Holt Renfrew, Harry Rosen and even some of Forzani's stores. Sporting Life, a familiar brand in Ontario, isn't yet a household name elsewhere, although its relatively early launch of e-commerce in 2008 has helped it spread the word.

Now it has hired top retail real estate adviser Northwest Atlantic (Canada) Inc. to find it more physical space. But nabbing attractive retail sites is itself a competitive exercise. Northwest knows all about it: The brokerage has also been retained by heavyweight Nordstrom, among other leading foreign retailers, to find store locations in Canada.