When A Big-Box Retailer Came To Coeur d'Alene, A Family-Owned Business Had To Get Smarter

Brian Knoll walked over to a pallet of boxes with Chinese writing.

Chinese imports aren’t the norm at Black Sheep Sporting Goods, his family-owned business in Coeur d’Alene, Idaho. He opened one up, and discovered a box of Kendamas, Japanese toys with red balls with two cups on either side of a stick. They surely didn't fit the company's current inventory mix of clothing, guns, kayaks and other outdoor equipment.

“What in the world?” he was thinking. “This must be a mistake.”

He inquired of one of the workers and was told the toys had indeed been ordered by Dave Knoll, Brian’s father, who founded Black Sheep more than 45 years ago.

“Maybe he’s finally lost it,” Brian Knoll thought.

Nope. The retail instincts that allowed Dave Knoll to build a tiny sporting goods store into a $10 million-plus business were still good. The Kendamas his son thought were crazy were the one of the store’s top sellers for the next two years, the younger Knoll remembers with a laugh.

With tactics like guerrilla buying and deep relationships with suppliers, Black Sheep survived Nintendo’s assault on toy retail in the 1980s, and an incursion by Sportsman’s Warehouse in the early 2000s. It’s still competing against Cabela’s, but Black Sheep was bustling on the Saturday I visited.

“I’m really proud of my dad,” he says. I’d dropped by the store on a visit to Idaho and ended up interviewing both Knolls, Brian in person and Dave over the phone.

At its peak, there were four stores. Now there are two, the main operation and an outlet store, as well as a Jake’s Dry Dock, run by Brian Knoll’s sister, Kelly Cromwell. With more more than 60 employees, Black Sheep is gradually moving online (it sells guns online already, but they have to be picked up in the store).

The elder Knoll started his company in 1975 at the age of 18, not out of grand aspirations to be an entrepreneur, but because he needed an income, he said. He’d been working for the White Elephant, a surplus store founded by his uncle. He was the only one of the family to leave the business, so he became the Black Sheep.

He saved up about $2,000 in capital and rented a store for $500. The incentive he gave his first workers, he told me, was four tacos, which he could buy for $1.

Knoll credits the company’s against-the-odds success to his father's training in surplus buying and his ability to build relationships with distributors 

“It’s just about keeping your ear to the ground,” his father says.

The elder Knoll, formed close relationships with distributors, which enabled him to become aware of opportunity buys. That mean items he could sell for lower prices, because he bought them so cheaply, and potential hot new toys of all shapes and sizes.

Those relationships also made a world of difference when the toy business, which had been fully half of Black Sheep’s revenue, collapsed in the late 1980s. Nintendo wiped out much of the market for everything else, like the Barbies and Tonka Trunks Knoll had purchased that year.

The company scraped through on credit and Knoll’s ability to negotiate terms and deals with distributors. His willingness to take risks helped Black Sheep survive against Sportsman’s Warehouse, when the the chain came to town, too.

They arrived in Couer d’Alene in 2007, came to the elder Knoll and said, “We’ll allow you to sell out to us for pennies on the dollar.”

“It was David vs. Goliath,” he said. “We’d been in business just shy of 30 years.”

But the community rallied around Black Sheep, and Dave Knoll was able to keep buying and selling at lower profit margins than his competitor was willing to accept.

“They have to maintain a certain profitability — that's their Achilles heel,” Knoll said. “They have to stay uniform. All my competitors have always said — you're too unpredictable.”

“We’re the Minuteman up against the British Army.”

Sportsman’s Warehouse eventually grew to 57 stores — Knoll still knows the numbers — but it overextended, and the owner had to sell some stores to settle a debt, and eventually close others. 

“We were getting the champagne ready,” Knoll said, “But we had to hold out for eight more years.”

They were gone by 2013, though Black Sheep still faces competition from Cabela’s.

After Sportsman’s Warehouse pulled out of Couer d’Alene, Black Sheep consolidated and moved into its space.

The store had every outdoors item I could imagine, from bear bait, to meals ready to eat, to lanterns and a Red Ryder bb gun. The biggest volume in the store is taken up by clothing. Guns and ammunition occupied about an eighth of the store.

Brian Knoll had the retail bug, too — the first time he unloaded a truck he was wearing a toddler’s jumper — but he didn’t originally intend to go into the family business. After college, he became a manufacturers' representative in sales sporting goods business. He was living in Salt Lake City when he heard that Sportsman’s Warehouse was expanding in his father’s territory. He quit to come back home. “I knew they were coming this way and I didn’t want to be disloyal,” he says.

He’s gradually been taking over the operation of the business. His father taught him not to let a computer made decisions. “You’ve got to look ahead,” he says.

But both men say they long for the way it used to be. Though the family has always worked hard — Dave Knoll didn’t take a day off for the first 25 years of the business — they could turn it off at night and sometimes on weekends. The 24/7 customer demands get to them now.

Neither believes that it would be possible to build an independent retail giant these days. There’s so much knowledge about consumer’s buying patterns, and so little variation in the products and prices, that it would be almost impossible to get the deals that enabled Black Sheep to fly almost 50 years ago, he says.

“This whole way of doing business is gone,” Dave Knoll says now, sadly. “Going forward, I don’t know how you do it.”