Remember just about this time last year when Dick’s Sporting Goods announced it would cease sales of so-called assault rifles? The company then made a very public show of physically destroying their existing inventory, all in the name of ending gun violence? This media circus only exacerbated the situation. So, how did that work for them?
The first thing it did was to incur the wrath of hunters and shooters…a big part of their customer base! Customers were further insulted with the company when it announced that it would no longer sell firearms to anyone under 21, nor would it carry high capacity magazines. The company then poured salt in the open wound when it hired three gun control lobbyists in Washington, D.C. to fight for additional gun control measures. All of these actions were ordered by Dick’s CEO and majority shareholder Edward Stack.
Many customers, especially shooters and hunters vowed that they would never spend another dime with Dick’s. And quietly they did it…and stuck together with their resolve.
History may look back on this as one of the most effective boycotts related to firearms and Second Amendment rights.
From a bit of insider industry scuttlebutt, you may begin to here about financial problems within Dick’s Sporting Goods. The mainstream media will talk about the economy, financial issues and the loss of jobs, but I don’t think they will write about the root cause.
Almost immediately after the imprudent business decisions mentioned above, Dick’s overall retail sales dropped. Apparently, Mr. Stack failed to realize that gun owners buy more than just guns.
The actions of Dick’s Sporting Goods toward guns and gun owners drew far reaching consequences. Several of their big firearms manufacturers and suppliers, MKS/Hi-Point, Mossberg, and Springfield backed up the shooting community and refused to sell any more of their products to Dick’s. The National Shooting Sports Foundation revoked Dick’s membership and issued a news release stating they were “disappointed by Dick’s decision.” The shooting public has been taking notice of all this.
Dick’s stock plummeted 47-percent to its lowest 52-week price and has not totally recovered, but it has begun to trend back up. Stockholders are not amused.
You can still buy guns at Dick’s, but if you go to their website, it is not easy to find anything related to the shooting sports. I had to drill down into the website to get to any firearms.
To compound the issue, Dick’s other property, Field & Stream stores, has also paid the price for the company’s political posturing.
A Pennsylvania (where Dick’s is headquartered) judge recently ruled that a lawsuit field against Dick’s can move forward. Battle Born Munitions filed suit against the company in October, alleging that the retailer failed to take delivery and pay invoices for Field & Stream-branded ammunition they had ordered. Without AR-style rifles to sell, they didn’t need an ammunition inventory.
The suit is seeking $5.5 million in damages. Battle Born Munitions says Dick’s not only damaged Battle Born’s ability to operate in the industry, but its failure to comply with the agreement harmed their reputation.
Since the ammunition was branded Field & Stream, Battle Born said it could not be resold. Battle Born had to store the ammunition for an extended period of time and that cost money. Those unexpected expenditures were needed to complete other business deals which the company lost due to Dick’s actions.
So where is the Dick’s Sporting Goods/Field & Stream business headed? I’m not a business expert or forecaster, but I’d say Dick’s is in a downward spiral from which it may not be able to pull out. Selling tennis shoes, jogging apparel and bicycles will only carry the business so far.
Dick’s CFO, Lee Belitsky, recently told stock analysts and share holders that there won’t be any more Field &Steam stores, and there’s no guarantee they won’t close the existing stores. Dick’s is also significantly reducing the marketing budget for its Field & Stream stores it still operates.
Another sign of financial troubles is that last month, Dicks ended its U.S. Olympic Sponsorship. There were 86 athletes in the program. These individuals worked in some capacity for Dick’s and were allowed to work very flexible schedules so they could maintain their training routines. Apparently, that program is over and these employees have been given the option to remain Dick’s associates and move to a traditional sales associate’s role. How many of these athletes do you think will stay with the company?
In one more bit of insider industry information gathering, I’ve learned that Wall Street sources and analysts are operating under the presumption that it will only be a matter of time before Dick’s either totally restructures and/or is gone from the retail scene.
Watch and see what happens!