Sportsman & Ski Haus President Dave Harvey remembers well the day his business partner, Chief Executive Officer Mike Gwiazdon, told him there was big competition moving in next door.

He had just gotten back into town and Gwiazdon wasted no time in pulling him aside.

“Sit down. Cabela’s is coming in, and they’re going in over there,” Gwiazdon told Harvey, pointing to the west side of U.S. 93 in North Kalispell.

The addition of a Cabela’s Outpost store to Kalispell’s commercial landscape last fall was a pivotal moment for Sportsman, which had garnered a sizable share of the sporting-goods market in the Flathead Valley for decades.

The competition has made Sportsman focus even more on customer satisfaction and a few new ways of jazzing up its retail offerings, Harvey said.

He shared Sportsman & Ski Haus’ story of meeting the challenge of change head-on at the Blueprint for Business Success lunch meeting Wednesday in Kalispell.

There was a time, he said, when the Sportsman owners had the 80,000 Flathead-area residents pretty much all to themselves. They thought the demographics were too small for the big box sporting-goods stores to bother with.

“It was our little secret,” Harvey said. “We thought the box stores weren’t interested.”

Sportsman also had benefited, he added, because “the average family here is disproportionately interested in the stuff we sell.” The store’s sales per square foot of retail space were way above average.

But the draw of Canadian shoppers and the huge tourism juggernaut led by Glacier National Park visitors were factors a company such as Cabela’s couldn’t ignore.

Cabela’s CEO Tommy Millner touted Kalispell as a “hot zone” for his company when he spoke to a local firearms group in September 2012. By tracking its customers through credit card purchases, Cabela’s noticed a brisk business for catalog sales in the Kalispell area.

Harvey said he and Gwiazdon didn’t know much about Cabela’s smaller stores, so it was time to get to know the competition.

“We sent a parade of employees to spy on the Yakima [Washington] Cabela’s store,” he said. “We sized it up pretty well.”

Harvey himself “played customer” at the Yakima store, one of Cabela’s busiest Outpost stores, to learn the intricacies of how the company handles customers.

What the Sportsman owners learned was that the groundwork they had laid in retaining good employees and developing customer service is a solid foundation that will carry them into the future as they expand their Kalispell and Whitefish stores.

And they will continue to develop niches within the sporting goods industry that Cabela’s doesn’t tap into.

A 30,000-square-foot addition to the Kalispell Sportsman store, currently under construction, will allow a heavy emphasis on golf equipment, among other things, complete with two state-of-the-art golf simulators. With the Flathead Valley known as a golf Mecca, it made good sense to target that audience.

The goal all along has been not simply to have a bigger store, but to retain Sportsman’s individuality and give customers the variety they want.

“Our company is unique,” Harvey said. “We have a specialty flair. We carry the top brands, Sage, Patagonia ... We still think brands mean something.”

Cabela’s is more focused on private-label goods that carry the Cabela’s name, Harvey noted.

“We’re not naive. They have their loyal customers ... [the competition] has been good so far. It’s a definite asset to the valley,” he said. “What really matters is customer satisfaction.”

Harvey said he and Gwiazdon also wondered about how the addition of a Walmart superstore next door might affect their bottom line. So far that box store has been a traffic generator.

“We were up 12 percent the first week Walmart opened,” he said. “Our cash registers were humming.”

The commercial development of North Kalispell has created a trade center environment in which retail businesses benefit from the growth.

“There are more businesses and more choices. It’s better for all of us,” Harvey said.

With Sportsman’s purchase of four Tri-State Outfitters stores in Idaho and Washington four years ago, the company now has 280 employees in three states. Prior to that acquisition, Harvey spent a great deal of time “spying” on those stores, too, looking at their staff competency, how old their inventory was and their customer base.

“What we concluded was that it was pretty well run,” he said.

But the Sportsman owners didn’t just go with their gut feeling on the Tri-State acquisition. They hired an outside consultant to make sure it was a good business move. The end game, Harvey said, was preserving Sportsman’s position in the sporting goods industry, which it has done.

The expansion to two other states hasn’t been hassle-free, though.

“We way underestimated how complicated it is when you’re in three states and have to make the team play on the same field,” Harvey said. “It doubled our total business, but it also doubled our headaches and doubled our employees ... we had to figure out how to teach our philosophy” to the new work force.

Harvey attributed the success of the Sportsman & Ski Haus to anticipating retail trends and staying one step ahead of everyone else in the industry.

In large part, Gwiazdon has been the one with his eye on the horizon, spotting many of those trends before they kicked in. He joined the business in 1973 as manager of the ski department and became a partner in 1981 with store founders Mel James and Don Burks.

Investing in inventory management software long before anyone else in the industry positioned the company for success early on.

“That gave us a head start,” Harvey said.

Choosing the right employees also has been a key ingredient to continued growth. In 2000 the company began an employee stock ownership plan that gave workers a vested interest in making the business the best it could be.

Along the way Gwiazdon tapped into The Friedman Group’s renowned Gold Star retail training, bringing a couple of key employees with him to Las Vegas for the intensive course. It was another move that catapulted Sportsman forward.

“Harry Friedman [founder of the Gold Star program] never had a company that didn’t increase sales by 10 percent” after taking the course, Harvey said. “We were up 11 percent that first year.”

The essence of the Gold Star training is “raising sales to an honorable profession,” he said. “If you just give pay raises without accountability, it wouldn’t have worked.”

Sportsman makes sure its department managers have the skills they need to mentor and coach underperforming employees. It’s not about making high-pressure sales, Harvey explained; it’s about “making sales that wear well,” sales in which customers feel they’ve gotten great value for their money.

As with any work force, that kind of training continuously “is a work in progress,” he added.

Harvey said a key to his personal success has been to acknowledge he doesn’t know everything.

“I made sure at each step of this brave new world of expanding the company I had knowledge of all the steps,” he said.

For the construction of the new Kalispell Sportsman store in 2007, that meant tapping into the expertise of programs such as SCORE, the Senior Corps of Retired Executives.

“Mike had let me manage the expansion. I was an owner; it was my future,” Harvey said.

The $11 million project seemed over the top, with $65,000 spent on a moose sculpture outside the front doors that since has become a tourist attraction.

“We built a Taj Mahal, and it was a freakin’ home run,” he said. “The valley was champing at the bit to see what we’d done.”

Harvey hopes to get the same kind of response from Sportsman’s customer base when the new addition opens this summer.

“We have confidence it will work,” he added.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.