The Quorum Group of CompaniesBy Bernie Cahiles-Magkilat
Taking over the responsibility of a family business is already hard, but a family business that is named after you or a brand that carries your name is doubly difficult. This is what happened to Toby Claudio whose name was used by his father as a brand when the senior put up the family’s Toby’s Sports business.
Toby, however, was just too glad that his father built a business that is perfect for him as he fully embraced sports not just as a business, but as his advocacy.
Quorum Group of Companies (QGC) has been at the forefront of the Philippine sports industry since its establishment in 1978. Over the course of 40 years, QGC has expanded its interests into specialty retail and distribution. QGC’s retail arm, which operates under Quorum International, Inc., has four brands under its belt — Toby’s Sports, a sporting goods store; RUNNR, a running specialty store; Urban Athletics, a cutting edge sneaker and street wear store; and Move, a fitness specialty store. QGC’s distribution arm, Sports Resources, Inc., is the exclusive distributor of a wide array of top international sports brands in the Philippines.
Toby’s Sports is the leading multi-brand sports retailer in the Philippines, having delivered the best in sports and fitness products to millions of Filipinos for 40 years. Established in 1978, Toby’s Sports is included in the Hall of Fame of Most Outstanding Retailers by the Philippine Retailers Association (PRA) and is a Department of Trade and Industry’s “Bagwis” awardee for consumer satisfaction. Toby’s Sports carries over 60,000 items from the world’s top sports brands, as well a diverse lineup of its own brands that offer superior value-for-money.
It currently operates over 50 stores across the Philippines, as well as an online store (www.tobys.com).
SPORTS Resources, Inc. (SRI), the distribution arm of QGC, engages in the distribution of major sporting and fitness brands in the Philippines. Established in 1985 as a subsidiary of QGC, it handles in-house product design and manufacturing. SRI became a separate corporate entity in 1993 after its initial success of signing an exclusive distribution deal with renowned Tennis brand, Prince. Currently, SRI boasts a nationwide sales and distribution network across the Philippines and is the country’s exclusive distributor of top international sports and fitness brands, such as Brooks, TYR, Polar, JK Exer, GU Energy Gels, Wilson, Lotto and Lonsdale.
RUNNR is the first world-class running specialty store in the Philippines. Established in 2009, RUNNR offers state-of-the-art foot and video gait analysis, and carries top global running brands — Brooks, Newton, Asics, Saucony, Nike, Adidas, CWX, GU, Fuelbelt, Fitletic, TYR and HOKA ONE ONE to name a few. RUNNR was awarded as Outstanding Filipino Retailer in 2015 by the PRA and was heralded as one of the best stores for runners in Asia. It currently has four stores across the country.
Urban Athletics was recognized as the Specialty Retailer of the Year by the PRA. It currently operates three stores in Metro Manila and an online store (www.urbanathletics.com.ph).
Child of the owner
Toby, the eldest child of Mr. Claudio, was only four years old when the store was established in 1978. His sister was 7 years younger. Toby was made company president in 2009. Moving forward, Toby’s is now on its 40th.
Year 2017 could perhaps be the biggest year ever for this sports retailer. The company was named the Most Outstanding Philippine Franchisee for the Philippine Franchise Association. Toby’s has been franchising since the ’80s. Toby’s also joined the list of Hall of Fame awardees after receiving the PRA Retailers Award for three consecutive years.
There are now 54 Toby’s stores all over the country with 17 under franchise, making the group the country’s number one sports apparel, equipment and sports accessories store.
“We just opened two stores last year in Gateway in Araneta, Cubao,” says Toby, who feels it was a homecoming for them in this Cubao area, which used to host its third store.
“In terms of footprint, definitely we are the biggest,” says Toby. A survey in late 2016 also showed that they are on top of mind as the country’s top multi-brand sports retailer.
When survey respondents were asked where do they buy their sports apparel and stuff, Toby’s also ended up four times higher than its nearest competitor. Its competitors are not even other sports retail stores but sports brands like Nike and Adidas. So, it was a surprise that they came first in terms of branding.
It could be because Toby’s has also evolved over time and become more dynamic. The infusion of new blood in Toby has paved the way into the a more dynamic organization.
Toby In 2013, Toby’s implemented some rebranding efforts. It has 10-15 of its own in-house brands have been designed, developed and manufactured here and abroad.
Their products are imported directly from the manufacturers all over the world in the US, Europe, China, Vietnam and Taiwan. They source locally for apparel and balls, which are exclusively done for Toby’s. With good quality products, customers think they are international brands carried by Toby’s when they are in-house brands of the company.
They offer basic but value for money sports items such as badminton, volley balls, nets for different kinds of sports and accessories, and other fast moving consumable items that sports-minded people purchase often.
For apparel, they have developed their own brand where items include lifestyle accessories like socks are imported from France. There are also sports accessories, including locally produced balls, rackets, badminton sets, caps, hats, and other basic sports necessities.
“This is an opportunity to give customers affordable options so aside from our own we have also exclusive brands,” he adds.
According to Toby, retailing has changed a lot. It demands that retailers offer something different to customers.
“What I really like is I have something different to offer because the problem with retailing nowadays is you cannot just offer the same product all the time so offer something with distinct advantage so customers will also prefer going to you,” he adds.
This strategy is very deliberate on their part to offer a very strong lineup, which is a combination of world-renown brands and new brands they distribute exclusively and products they develop and design on their own.
For its own apparel, these are exactly designed with the Filipino specifications in mind considering the smaller build and height. This is especially true for imported tights, which are always long for most Filipinos.
This means, they will constantly grow its franchise business because there is so much growth in the economy with several malls sprouting not just in Metro Manila but also in the provinces.
The strength of their brand has also enticed several entrepreneurs to apply for franchising opportunities in the provinces.
Aside from the expansion of in-house brands and new outlets, Toby’s also embarked into digital marketing.
“E-commerce is very exciting because there is so much potential and I think we have big advantage because of our brand recall and we get lots of organic searches where the first word customers type with when they look for anything under sports supply is Toby’s,” he adds.
“We’ve made a lot of headway in e-commerce last year because although we always had a presence with Tobys.com in early 1980s, but we totally revamped the whole e-commerce business in 2000,” says Toby.
A whole new division was set up for e-commerce with the goal of having the best sports e-commerce website in the Philippines. The idea was to give customers more convenience because they can shop from the bulk selections of Toby’s merchandize at the comfort of their homes 24 hours a day.
“Wherever they are we deliver, so even those abroad whose relatives are here they can have it delivered and we’ve seen really spectacular results from our efforts such that we really think that we have to give more focus in building our e-commerce presence,” adds Toby.
Revenues coming from the e-commerce division is still small, accounting for a small 2 percent yet, but it is growing very fast. Toby’s also offers all forms of payment methods, including cash on delivery.
Toby expects this division to contribute higher in the future because the e-commerce business in the US now accounts 10 percent of a company’s overall revenues.
“The orders we ship vary from footwear to apparel, accessories and equipment,” he adds noting that shipping services are mostly for customers in the provinces.
Their e-commerce platform has offered seamless experience with its stores and customers. With stores all over the country, buyers can easily connect to the store wherever they are. They are now heavy in promoting the website and very soon they will launch kiosks in strategic malls so customers can try out the website. In the future, shoppers can buy online and can pick up the merchandize at the store nearest Toby’s store. At present, the store can only handle returns.
There are competitors in the market for Toby’s, but they are not as comprehensive as Toby’s. Most of them are owned by foreign retailers.
“We have the biggest footprint in terms of sizes and strong online stores,” he adds.
Both the offline and online are growing. There are 58 stores at present, but Toby sees the opportunity to build more to 70 in the next two three years. He is looking at opening in 3 to 5 malls in the provinces this year in Naga, Dagupan or Urdaneta and La Union.
The dynamism of Toby’s, supported by its in-house brands and other sports related brands, has ensured a double-digit growth in 2017. This is in contrast to other retailers, which sales contracted last year for failing to cope with the onslaught of e-commerce.
For this year, Toby sees another double-digit growth again.
“There are lots of retailers, who are also doing well, but generally worldwide the retail industry is challenged but in our side we have great category and few things are going for us, we have different store formats and new brands that are exclusive to us,” says Toby citing HOKA, a US brand that is exclusively distributed by Toby’s.
Driving the growth for Toby’s is the new wave of health-conscious Filipinos, who are adopting to a healthier lifestyle.
“Filipinos are trying to do new things from triathlon to fitness, and gym classes, cross fit and I think lots of Filipinos want to stay physically fit by getting involve in sports activities,” Toby observes adding that more are in love with basketball games, tennis and badminton as options.
This new healthy lifestyle is also partly a result of the growing middle-class population. With more disposable income, individuals are encouraged to live active and healthy lifestyle. This drives demand for sports equipment, apparel, and accessories.
Toby himself practices what he preaches. He stays fit and on top of his health regimen, spending 3-4 times a week for workout.
“If you’re not moving and using your body then it misses on something,” adds Toby, who had done the Ironman.
Toby even trained hard for two hours every day for his triathlon because he never learned how to swim as a kid. And he noticed that when he stopped training and exercising, his body was kind of looking for it.
“Now, when I don’t train, swim, bike or run I could not be thinking straight,” he adds noting how running helps make him a better businessman.
“This is the reason that lots of executives really got addicted to triathlon because training is such a drug, an endorphin rush and brain functions much better with good cardio. Exercising often especially at the start of the day, I feel more pumped up and productive for the whole day. So, when I feel most stressed and major decisions are to be done, I start the day with workout as a moving meditation, and it works well especially in swimming when you cannot listen to music.”
“A lot of runners are not listening with music because when you’re alone with your thoughts, it is time to reflect and time to focus and when you are moving you put more blood into your brain so you can think straight and become more productive. So, I really advocate for people to find fitness often and do it regularly.”
Not only that, Toby is a voracious reader of books on exercise like “Spark: The Revolutionary New Science of Exercise and the Brain” by John J. Ratey, and the “Power of Habit” by Charles Duhigg where the book opens with a woman who was really down and out from drugs and failed marriage, but one day she decided to join for a race and got to the habit and the rest was history. Exercise is the cornerstone habit that changes all the rest of her habits and a different path to success.
According to Toby, when he started training for running, he also began developing habits, a work system of getting things done. This led him to start a new business.
Perhaps, he had also this odd feeling of not having started anything in business, but just succeeding his father’s. But, whatever, this gave birth to Runnr, a specialty store for runners, in BGC. Runnr has a different concept that he developed from scratch.
“I marked off the area and I said ‘Fernando Zobel, a triathlete, would love it’ because it was the first specialty store for runners,” says Toby. True enough, Runnr broke all records. It opened in 2009 when running as an exercise was booming. It scored as the fastest return on investment and the most profitable store. It was voted as the most promising and outstanding retailer, an award given by Ayala Malls to retailers in that area.
His drive at success was largely push by his habit of running.
“If not for the habit of running, I may have not gotten around to starting the business,” says Toby.
Knowing what you want to do is important key to success.
“I care a lot about our store so I know exactly what I want because I put 100 percent of myself into it because retail is so difficult. I try to inspire my staff to want to do something and explain and convince them why we have to do it,” says Toby, who finished business economics at the University of the Philippines.
Toby is more of the motivational boss, rather than dictate on what his people should do.
“Our people understand our business because out there they also try to live an active lifestyle. We’ve learned so much, but we do not pass on every chance to learn. From omni channel retailing we have to evolve faster. We just have to learn ourselves because our organization keeps evolving,” adds the father of three boys, who he nurtures to become sports-minded individuals.
What they have achieved so far is not reason to rest on their laurels. Toby is always looking for the next challenge.
In the future, Toby dreams for a public offering for the country’s first sports issue.
“It is an option to consider, but it is for the long term,” says Toby, who also revealed they will have yet to focus on its local and possible expansion overseas before listing in the stock exchange. They have inquiries from all over and they are not closing their doors for opportunities outside of the country.
True to its calling to promote sports and develop sports enthusiasts become entrepreneur themselves, the Toby’s Youth Sports Foundation was established in 1999 by Toby’s Sports as a non-profit foundation with the goal of uplifting the lives of Filipino youth through sports, recreation and fitness.
It has remained faithful to its “Help Kids Play” motto as the foundation continues to focus on grassroots projects that capitalize on the excitement, relatability and popularity of sports to provide health literacy and social empowerment to Filipino kids from all walks of life.
Toby is also actively looking for highly motivated and sports enthusiasts to turn their passion into business.
As the child of the owner, Toby could have go on without the cares of the world. But he would like to be his very own man and not just the shadow of his successful father.
“But I cannot complain, he taught me how to appreciate these things and he put my name on the design so I feel the pressure, but I consider myself extremely blessed because I love what I am doing so it does not feel like work. The biggest benefit is my father could have chosen many other industries but he chose the perfect one and he put my name on the sign,” says Toby.
While Toby is on top of the family business, his father and his two uncles are still very active in the family business.
Toby is also aware of the usual family business story wherein the first generation establishes the business, the second builds/expands it, and the third squanders it.
With Toby, the family’s business is in good hands.