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Tempe hockey retailer expands from online to physical space

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TEMPE – Sauce Hockey started in a Tempe garage with six T-shirts, two hats and a website.

The hockey lifestyle clothing retailer has since become an international company with offices in the U.S. and Canada.

Six months ago, Sauce expanded from a digital-only retailer to setting up a physical store in its offices above World of Beer on Mill Avenue. It’s an unusual business move – one that experts say goes against the current.

But the owners said it is a first step toward a larger vision.

Making Sauce

“I was working at a retail hockey store and saw kind of a niche where the apparel was in the hockey industry,” said Eric Kleineck, owner and CEO of Sauce.

Kleineck and his partners wanted to offer something different, something cool.

So in 2009, they launched Sauce online. It immediately took off.

“We had some traction on e-commerce and naturally had some retailers that wanted to get in on the Sauce movement,” Kleineck said. “We try to partner with good retail partners who have a good hold on their marketplace in their local markets, and it kind of grew from there.”

The brand has become almost synonymous with the hockey playing lifestyle. As sales increased, Sauce connected with high-profile players in the National Hockey League, including Paul Bissonnette, known for his fights and outspokenness on Twitter, and Pavel Datsyuk, a four-time NHL All-Star and two-time Stanley Cup winner.

The company supplies retailers in North America and Europe, and it fulfills customer orders worldwide.

It now has 30 employees as well as independent contractors who help with areas such as legal advice and video production.

Beyond the digital

The company opened its store in mid-2014 and has used social media to promote it through posts on Twitter, Facebook and Instagram. The company has gained a devoted social-media following from the hockey community, partly because of its partnership with Bissonnette.

Kleineck said he sees the store location as an opportunity to reach out to and engage the community more. It’s an experiment to see if opening physical locations could work for Sauce in the future.

“It comes down to timing and doing things when the time is right,” Kleineck said. “We are kind of looking at a direct consumer model a bit with that. We still love our retailers and want to support them, but brands like Nike sell to retailers all the time and have their own flagship stores. So we are looking at a model like that.”

The store itself is a reflection of the company’s clientele. It’s run by guys in their mid-20s, decorated with signed hockey memorabilia and features a large television tuned to NHL Network.

But rapid growth could cause problems for Kleineck’s Sauce philosophy.

Sauce leaders want to create lifelong relationship with customers. Sometimes Kleineck and his coworkers put extra things into packages they send out: A $5 bill and a note that says, “Your first drink is on us” in a wallet or maybe an extra hat or a personal letter.

It’s a feature that might be difficult for them to keep as they expand.

A retail trend?

According to a report from Massachusetts-based retail analytics group Forrester, online sales account for 9 percent of overall retail sales. More retailers are moving into the digital space than ever with growth estimated to stay between 8 and 11 percent through 2018.

But, experts say few retailers have moved in the opposite direction, according to the National Retail Federation. So few, that no major studies have been conducted by the federation.

A few other businesses in the Phoenix metro area have made the shift to brick-and-mortar from online only: Fluffit Marshmallows recently opened a gourmet shop in Gilbert and Strawberry Hedgehog, which makes vegan bath and body soaps, opened in Phoenix.

One expert said the moves are unusual.

“For a pure-play online retailer, their options are a little limited because they are going backwards against the flow,” said Lee Holman, a retail analyst with IHL Group, a Tennessee-based research and advisory firm. “For them to move into the brick and mortar space, that is a different kind of play.”

Some retailers, like Amazon, have experimented with a physical presence by renting lockers in where customers can pick up items they’ve ordered. Others, like eBay, have made partnerships with physical stores to deliver goods more quickly and possibly save money, but the concept is still in its infancy.

“Some companies like Amazon are moving backwards,” Holman said. “They are exploring and trying to understand that a brick-and-mortar presence is going to look somewhat different from what their online presence might be.”