Dick’s Sporting Goods Inc. is leveraging consumers’ affinity for the outdoors, but also sees growth opportunities in apparel — which includes testing a store-within-a-store concept with Ralph Lauren’s Polo Sport brand.
Edward W. Stack, chairman and chief executive officer of the retailer, spoke to investors at the Goldman Sachs 22nd Annual Global Retailing Conference in New York Wednesday. Stack said the company — with $6.8 billion in annual sales — has a 10 percent share of the sporting goods retail market.
The company offers a core merchandise lineup that includes fishing and camping gear, which are the more heritage categories close to the retailer’s origins as a bait and tackle shop. “We also provide our customers differentiated product offerings across a diversified portfolio of categories including apparel, team sports, fitness, the outdoor category, golf and footwear,” Stack added.
The ceo sees a lot of opportunity in apparel and activewear, which is why the company is testing the in-store concept with Ralph Lauren. “We’ve got 75 of these stores that will be launched this year and is a test, and we’ll see how that goes. But we continue to remain excited about being able to grow this whole apparel business, which has a higher [gross margin return on investment] than most other categories in the store,” he said.
Stack added that private label is also key to its business. “This also includes a stable of private brands including Field & Stream, Calia by Carrie Underwood that we launched this year, Top Flite, Umbro and Reebok, which all of these are growing at a faster rate than the company as a whole at margin rates 600 to 800 basis points higher than what the brands provide,” the ceo explained.
Despite uneven consumer spending patterns, Stack said the company has delivered robust results. “Although the environment has been a little bit challenging recently, we’ve generated eight consecutive quarters of positive consolidated same-store sales, delivered 90 percent-plus new store productivity for the new stores that we’ve opened. And we’ve driven strong double-digit growth across our e-commerce business over the last several years,” Stack said adding that the company aims to have sales of about $9 billion over the next several years.
E-commerce plays a critical role in that growth, Stack said adding that the in-store experience is also important. “Stores play a critical role on our omnistore and our omnichannel strategy,” he said. “Stores offer strategic advantage as they build brand equity, showcase our vendor partnerships, enable us to offer value-added services to our customers, augment our online capabilities, and help drive our e-commerce sales. There’s more flexibility in our brick-and-mortar platform than I think people understand.”
Stack noted that the “multichannel customer spends three times as much as a single-channel customer.” He said e-commerce sales in new markets “typically double when we open a Dick’s store in the area. With approximately 80 percent of our orders that are shipped to customers within a trade area of a Dick’s store, many of these customers are shopping as both online and in-stores.”