Last year, two business decisions by brick-and-mortar retailers had many industry observers wondering just what was in store for them going forward. The first, Dick’s Sporting Goods (NYSE: DKS) incurred the wrath of hunters and shooters when it announced it would cease sales of “assault rifles” then ramped up the discourse by destroying, rather than otherwise disposing of, their existing inventory.
Dicks also announces an immediate cessation of sales of firearms to anyone under 21, an end to “high capacity magazine” sales and other actions -including the hiring of a pro-gun control lobbyist in Washington. All those actions, according to Dick’s CEO and majority shareholder Edward Stack, were to move the conversation on gun violence forward.
Dick’s stock took an immediate hit, racing to its lowest 52-week price and languishing there. In the meantime, Dick’s other property Field & Stream stores have also been paying the price for Mr. Stack’s virtue signalling.
In the latest news, a judge has ruled that a lawsuit field against the Coraopolis, Pennsylvana, based company can move forward. Battle Born Munitions filed suit against the company in Octobers, alleging the retailer failed to take delivery and pay invoices for Field & Stream-branded ammunition they’d ordered. The suit, seeking $5.5 million in damages, says Dick’s not only damaged Battle Born’s “ability to operate, but its failure to comply with the agreement harmed their reputation.”
Since the ammunition was branded Field & Stream, Battle Born alleges it couldn’t be resold and required them to store it for an extended period of time, resulting in “substantial loss.” Those funds, the suit alleges, were needed to complete other business deals, including the sale of several helicopters to a foreign government.
So where’s the Dick’s/Field & Stream business headed? No way of knowing for certain, but Dick’s CFO has made it plain to stock analysts that there won’t be any more F&S stores, and there’s no guarantee they won’t close the existing stores.
Last month, Dicks ended its U.S. Olympic Sponsorship, and offered the 86 athletes in the program that offered compensation and flexible work schedules the option to remain Dick’s associates and move to a traditional role.
Yesterday, we learned that the company was significantly reducing the marketing budget for its Field & Stream stores. Talking with Wall Street sources, analysts are operating under the presumption that it will only be a matter of time before Dick’s exits the category entirely.
The other company is Camping World Holdings (NYSE: CWH) the blend of Camping World and Gander Mountain by TV host and businessman Marcus Lemonis, has updated progress to date on their rollout of Gander RV stores- the “expansion of its national footprint to serve outdoor enthusiasts who are passionate about traveling in RVs and experiencing outdoor activities.”
Since the first store opened late last summer in Kenosha, Wisconsin, additional stores have opened in Ocala, Florida, Augusta, Georgia, Fayetteville, North Carolina, Huber Heights, Ohio, Jackson, Tennessee, Amarillo, Spring, and Tyler, Texas; Roanoke, Virginia, DeForest and Eau Claire, and Rothschild, Wisconsin.
The company says additional stores will open soon in Anniston, Alabama; Wichita, Kansas; Baxter, Hermantown and Forest Lake, Minnesota; Cicero, New York; Breaux Bridge (Lafayette), Louisiana; Springfield and Marion, Illionis; ; Coldwater, Michigan and Statesville, North Carolina.
According to Lemonis, the company continues to be “driven by our customer’s expectations for convenience and personalization in their shopping experience, while looking to enhance their outdoor adventure experience.” Exactly what he’s euphemistically referring to is beyond my understand, because I don’t know whether that means more outdoor gear or a larger store footprint.
One thing is for certain, Camping World Holdings is looking - aggressively- for locations that fit their business model. Maybe Lemonis and Stack should talk.
We’ll keep you posted.
—Jim Shepherd