NEWS: Dick’s Lost $150 Million Last Year Due to Restricting Gun Sales
Last February, when Dick’s Sporting Goods CEO Ed Stack announced he was restricting gun sales at the country’s largest sports retailer, he knew it’d be costly. At the time, Dick’s was a major seller of firearms. Guns also drove the sale of soft goods—boots, hats, jackets. Plus, Stack suspected the position could drive off some of his customers on political principle.
He was right. Dick’s estimates the policy change cost the company about $150 million in lost sales, an amount equivalent to 1.7 percent of annual revenue. Stack says it was worth it.
The 2018 school massacre at Parkland, Florida, touched a nerve for the company. Nikolas Cruz, the shooter, had legally purchased a shotgun from Dick’s a few months before the attack. A day after Cruz was arrested, police in Vermont apprehended a teenager with plans to shoot up his high school. He, too, had legally purchased a shotgun from Dick’s.
The two incidents were a last straw for Stack, a one-time Republican donor who in 35 years had turned his father’s bait-and-tackle shop into the country’s largest sports retailer. Two weeks after those arrests, Stack announced he was pulling assault-style rifles and high-capacity magazines out of all Dick’s stores. He vowed he’d never sell another firearm to anyone under 21.
The response was predictable. The National Rifle Association criticized his “strange business model.” The National Shooting Sports Foundation expelled Dick’s from its membership. Gun manufacturers like Mossberg refused to do business with him at all, and some shoppers followed suit.
What happened at Dick’s confirms new study results out of Stanford University. Respondents said they were more likely to buy a product to support a CEO’s political stance than they were to boycott in disagreement, but their actions revealed the opposite. When asked for specific examples, 69 percent could name a product they’d stopped buying, and only 21 percent could recall a product they started buying.
The stock price hasn’t suffered. Dick’s shares, which didn’t move much following the announcement last February, have climbed 14 percent in the 13 months since, outpacing the 4 percent rise in the benchmark Russell 3000 Index. On Friday, the company’s shares rose as much as 0.6 percent in New York.
The 64-year-old Stack is an unlikely champion of gun reform. Earlier this decade, he helped Dick’s double-down on its outdoor roots, buying licensing rights to “Field & Stream” and launching both a private brand and a new series of stores dedicated partially to hunting. He’s a gun owner himself and insists he’s not anti-firearm, just in favor of what he likes to call “common-sense gun reform.”
No longer a go-to store for many gun-owners and hunters, Dick’s is now navigating its new reality. In August, the company announced it would remove hunting supplies and equipment entirely from 10 stores and use the space for team sports like baseball. Sales jumped in the test stores, and the company will implement the change in 125 additional stores, about 17 percent of the total fleet. After a dip in the last 12 months, the company expects same-store sales to be flat or rise a little.
To be fair, guns were a shrinking part of Dick’s business before Stack changed the company policy. And annual firearm sales nationwide have dropped almost 17 percent since 2016, according to research firm Small Arms Analytics & Forecasting. Parts of Dick’s policy have been matched by others, including Walmart and Kroger-owned Fred Meyer, neither of which faced similar outcry or anger.
For full, original story, visit: www.bloomberg.com