Dick’s Sporting Goods – once a major seller of firearms, has lost around $150 million in sales after CEO Ed Stack announced last February that he would begin restricting gun sales at the country’s largest sports retailer, according to Bloomberg. What’s more, guns drove the sale of many soft goods, including hats, jackets and boots.
The dent in sales, around 1.7% of annual revenue, is worth it according to Stack – a billionaire who was born into wealth and probably hasn’t had to deal with too many home invaders in his sprawling Pennsylvania mansion, or his estate in Jupiter Island, FL, where the overall crime rate is 64% lower than the national average and there hasn’t been a murder in at least 14 years.
“The system does not work,” says Stack, adding. “It’s important that when you know there’s something that’s not working, and it’s to the detriment of the public, you have to stand up,”
Stack – once a Republican donor who turned his father’s bait-and-tackle shop into the country’s largest sports retailer – decided to oppose the Second Amendment after the 2018 Parkland school shooting in which gunman Nikolas Cruz purchased a shotgun from Dick’s. The next day, Vermont police arrested a teenager with similar plans who had legally purchased a shotgun from Dick’s.
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. –Bloomberg
Going even further, Stack announced during a March earnings call that the sporting goods retailer would no longer carry firearms at 125 locations – roughly 17% of US stores. The company will replace the firearms sections with other categories such as clothing and shoes.
The company also hired three gun control lobbyists, and announced that it would destroy all of the weapons it had stopped selling.
In response to the 2018 corporate decision, gunmakers Springfield Armory and O.F. Mossberg stopped doing business with Dick’s.
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.
Some people applauded the CEO’s decision and promised to show their appreciation with their business—a phenomenon called “buycotting”—but those people didn’t stick around. “Love is fleeting. Hate is forever,” Stack said. –Bloomberg
And while net income fell to $102.6 million vs. $116 million y/y according to Marketwatch, and adjusted same store sales fell 3.1% y/y for the 12 month period ending Feb 2, shares of Dick’s have remained resilient – climbing 14% in the 13 months since Stack announced the restrictions on firearms sales.
Field & Stream, Dick’s top-selling private brand, has been hurt the most by the decision. As Bloomberg notes, “the company faces a potentially larger decision about its 35 Field & Stream stores, located mostly in the south and Northeast.”
“Can they shift it to play more towards active outdoors versus bloodsport,” asks Susquehanna Financial Group analyst Sam Poser.
“They’re big spaces, and the majority of those leases are long-term. They’ll have some decisions to make, and I think they can figure it out.”
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. –Bloomberg
Meanwhile, Stack isn’t stopping there. Last month Stack was one of four CEOs to sign a letter supporting a universal gun control bill that recently passed in the house. He also recently joined the business council for Everytown Gun Safety – a nonprofit founded by Michael Bloomberg.
We’re sure law-abiding citizens in high-crime areas who want to protect their families can relate.
via ZeroHedge News https://ift.tt/2uDj5xW Tyler Durden