Defunct Joe’s lives on through a website…but who’s running it?

SNEWS® received a tip in mid-November that Joe’s Sports Outdoor & More website was operating as if Joe’s had not been liquidated -- which occurred in April 2009. The question is, who owned Joe’s if Joe’s was no more?
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SNEWS® received a tip in mid-November that Joe’s Sports Outdoor & More website was operating as if Joe’s had not been liquidated -- which occurred in April 2009. (Click here to read the April 10, 2009, story, “Bye-bye Joe’s -- liquidation seals its end.”) The question is, who owned Joe’s website if Joe’s was no more?

The answer: Alberta-based UFA Holdings/Wholesale Sports, a Canadian company which some may recall acquired 15 Sportsman’s Warehouse stores and renamed them Wholesale Sports in June 2009. (Click here to read the June 12, 2009, SNEWS story, “UFA announces stores acquired from Sportsman’s Warehouse will be renamed Wholesale Sports.”)

According to Natalie Dawes, manager of corporate communications for UFA, “We acquired the website two months ago out of liquidation, and as part of that acquisition, we took over the existing contract that Joe’s sports had in place with GSI.”

While UFA/Wholesale Sports now owns the Joe’s Sports Outdoor & More website, Dawes confirmed for SNEWS that it does not buy or own any of the inventory. GSI has its own set of buyers and merchandisers, and operates over a dozen websites on behalf of major retailers. As a result, it actually does the buying, warehousing and fulfillment for Joe’s, as it did when Joe’s was a viable retail store. Dawes told SNEWS that as the new owner of the Joe’s URL, UFA gets a percentage of every sale, just as Joe’s did.

Dawes added that UFA will not use the Joe’s website as the website or a referring website for the existing Wholesale Sports Outfitters (www.wholesalesports.com) website.

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“We are working toward launching our own Wholesale Sports branded website in the U.S.,” Dawes said. “Our ultimate goal is to have all online business conducted through our own website in the U.S. We did recently launch online sales in Canada for Wholesale Sports and it has been very successful.”

SNEWS went to the landing page for Wholesale Sports and clicked on the Canadian flag from the Wholesale Sports website and the following message popped up: “You are now leaving the U.S. site. Although we are unable to ship to the U.S. at this time, you are welcome to browse the Canadian site. Please sign up for our newsletter to receive details on the launch of our U.S. site.”

Currently, according to Dawes, there are no plans to do anything more with the Joe’s website than use it as an additional business opportunity.

But therein lies the rub. We know that UFA owns Joe’s, but do the customers? In fact, do the vendors whose products are still appearing on Joe’s know? Based on a number of calls SNEWS made to vendors asking questions, we suspect not many vendors know about the new owners -- or even if their products are still appearing on the Joe’s website. Both The North Face (see image to the right of authorized TNF product being sold on the GSI-operated Sports Authority site and the same product, not authorized, for sale on the Joe's website, also operated by GSI) and Kelty expressed surprise at the news their products were selling through Joe’s and equal surprise that UFA was the new owner.

We also could not find information online. We did track down ownership information on the affiliate information page on Joe’s, but the only reference to an owner is clearly incorrect as of June 2009:

“This Affiliate Participation Agreement contains the terms and conditions that apply to your participation as a member of the affiliate program (the "Affiliate Program") for www.JoesSports.com (the "Merchant Website"), which is a website operated by GSI Commerce Solutions, Inc. ("we" "us" or "Merchant") through an agreement with G.I.Joe’s Inc. (the “Merchant Partner”).”

Going to the GSI partner information web page, the following information describes Joe’s as of Dec. 7:

“Joe’s originated in 1952 when a young Army Air Corps pilot, Edward M. Orkney, returned from WWII and purchased a consignment of 2,000 army surplus sleeping bags for $1.50 each, which he sold at a modest profit from the back of his station wagon in Portland, Oregon. Orkney continued to sell his surplus goods, first out of a tent, and later from a permanent location in a building on Vancouver Avenue in north Portland. By 1956 this store had grown to become a destination for bargain hunters looking for fun and unique products. Becoming the Northwest’s premier destination for sports & outdoor gear, as well as top quality roof racks and other accessories for your car, truck or SUV, Joe’s is a first-class store for the serious outdoor enthusiast.”

We decided to call the customer service line for Joe’s, and received the following voicemail:

“Welcome to Joe’s Sports.com -- offering great service and huge selection all at great low prices…To locate the Joe’s store nearest you please press 1. To check the balance of Joe’s gift card, please press 2. To place an order, please press 3….”

Never mind that there are no more stores, you can still search for them. And, those Joe’s gift cards ceased to have value long ago. We searched for a store using the locator, but came up empty, as expected. So, we pushed 3 to place an order. That call took us, not surprisingly to a very busy call center and a customer service rep. We asked her if there were any Joe’s stores in our area, since we weren’t sure of sizing and might want to exchange a garment at a store if needed. She checked, and then told us she did not have any store information for Joe’s and that she was sorry.

And, what about all that inventory on Joe’s right now? It is hard to tell how much of it is authorized. Based on the few arbitrary calls we made, it’s likely there is a fair amount of product being sold that is not authorized under existing dealer agreements.

Why? For many dealer agreements and certainly true of the vendors we checked with, GSI is an authorized dealer as the company does purchase and warehouse product on behalf of its retail partners. However, while Joe’s was a retail partner of GSI when it had stores, it ceased to be an authorized dealer of an unknown number of vendors’ products when the stores and business were liquidated in mid-2009.

Several vendor representatives, who asked not to be named, told us that GSI is authorized to sell any vendor product on its retail partner sites only so long as the retailers are authorized dealers of a vendor. While The North Face product, for example, does appear on The Sports Authority website (run by GSI), it does not appear on the MC Sports website (also run by GSI) since MC Sports is not an authorized TNF dealer.

Court documents appear to indicate that GSI was granted the rights to continue to operate Joe’s website by the court. However, it is possible that, as a result, vendor dealer agreements were no longer valid. One vendor told us that for GSI to be able to sell on Joe’s, it would have had to modify the existing dealer agreement with Joe’s which, we were told, it would not have done. In addition, several vendors told us that they would not allow product to be sold on Joe’s, as they did not have dealer agreements with UFA or Wholesale Sports in the United States and that Canadian distribution agreements did not allow for U.S. sales.

It is worth noting that at least as far as the information on the Canadian website for Wholesale Sports is concerned, UFA does not sell equipment for fitness, golf, tennis, team sports or game rooms, or fan gear -- and yet all that equipment and more is being sold on Joe’s.

We tried to reach GSI for comment, but email queries and phone messages were not returned.

UFA had this to say: “Wholesale Sports is working with our vendors and GSI to ensure that we maintain our relationships in a way that works for all of us,” Dawes told us. “We’re proud of our 30-year history of serving outdoor enthusiasts by providing great products and exceptional service. We remain committed to doing so no matter what the channel.”

It does appear that GSI and UFA are, subsequent to our asking questions, now becoming very proactive about addressing vendor concerns because as of Dec. 7, all The North Face products and the store branding disappeared from the Joe’s website.

--Michael Hodgson

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