See Dick's shoppers run, putt, dunk, drive, dribble -- and buy. Fast-growing Dick's Sporting Goods operates about 480 stores in 40-plus states. The stores contain on average five smaller shops ("stores within a store") featuring sporting goods, apparel, and footwear for leisure pursuits, ranging from football, golf, and cycling to hunting and camping. In addition to brands such as NIKE and adidas, Dick's carries Ativa, Walter Hagen, and others exclusive to the firm. The company also operates 80 Golf Galaxy stores in 30 states. Dick's and Golf Galaxy both sell their products online. Dick's was founded in 1948 when Dick Stack, father of company chairman and CEO Edward Stack, opened a bait and tackle store.
Stack controls the company through his ownership of about 66% of the voting shares. Subsidiaries of investment firm Baron Capital Group own about 10% of the company's common stock.
The sporting goods chain saw its fiscal 2012 (ends January) sales increase 7% vs. the prior year to about $5.2 billion. Net income increased nearly 45% over the same period. The company credited a 2% gain in same-store sales and a growing network of stores for the gains.
Dick's has expanded in recent years through a strategy of acquisitions and organic growth. Within the past five years, Dick's has grown from 294 stores at the end of fiscal 2007 (ends January) to about 560 stores at the end of fiscal 2012. The company continues to add stores (40 new Dick's locations are planned in fiscal 2013) and has set an ultimate target of at least 900 Dick's locations nationwide, focusing its expansion on east of the Mississippi River in large markets. Dick's stores are the company's growth engine. Indeed, it added more than 35 Dick's stores in fiscal 2012 and no Golf Galaxy locations. (The previous year, the company shuttered a dozen underperforming Golf Galaxy stores, primarily due to the locations being inadequate or too expensive to maintain.) After the disposition of the underperforming golf stores, in fiscal 2012 Golf Galaxy posted about a 4% increase in same-store sales vs. a less than 1% increase for Dick's locations.
The company operates about 480 stores under the Dick's Sporting Goods banner in more than 40 states. It also operates 80 Golf Galaxy stores in 30 states. Believing that the sporting goods retailing market can bear at least 900 Dick's locations nationwide, the company is focused on expanding its retail footprint east of the Mississippi River in Atlanta, Chicago, and the corridor between New York and Washington, DC.
Mergers & Acquisitions
Golf Galaxy became part of the sporting goods retailer's portfolio in 2007. Dick's acquired the specialty golf retailer for about $225 million. The acquisition tightened the gap between it and top sporting goods retailer The Sports Authority and gave it a leg up in other areas, particularly because Golf Galaxy is recognized in the industry as a customer-focused, thriving company. – less