Yesterday, Bloomberg reported that Dick’s Sporting Goods’ CEO, Ed Stack, cost his company a whopping $150 million last year when he made the decision to limit gun sales at Dick’s and Field & Stream stores. Since then, he’s yanked all guns and hunting gear from scores of their locations nationwide.
Stack made the moves following the Parkland shooting, first pulling AR-platform rifles, “high capacity” magazines, and unilaterally raising the age for selling guns to 21.
As Bloomberg notes,
At the time, Dick’s was a major seller of firearms. Guns also drove the sale of soft goods—boots, hats, jackets. What’s more, Stack, the retailer’s chief executive officer, 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.
Was it? Dick’s is a publicly traded company. Its board and officers have a fiduciary duty to the company’s shareholders to act in the firm’s best interests and maximize their return.
Stack figured that the positive PR he’d get from the mainstream media over the anti-gun virtue signaling would outweigh the negative effect of alienating a significant portion of his customer base.
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.
It certainly is. Ask respected, Second Amendment-supporting companies like Ruger and Smith & Wesson how long some gun buyers’ memories are.
Then there’s Field & Stream. The outdoor label, which includes kayaks, camo jackets and sleeping bags, is the company’s top-selling private brand. Stack acknowledged that the gun decision has hurt Field & Stream sales and that the company faces a potentially larger decision about its 35 Field & Stream stores, located mostly in the south and Northeast.
So reading between the lines, the anti-gun moves may actually kill off the company’s Field & Stream stores. If you think any of that has Stack wavering about his decision, think again.
Stack’s not finished, though. For almost a year, Dick’s has been working with Glover Park Group to lobby for gun reform. Last month, Stack was one of just four CEOs to sign a letter supporting a universal gun control bill that recently passed in the house, and he recently joined the business councilof Everytown for Gun Safety, a non-profit that advocates for gun control.
Shareholders have probably been placated by the fact that despite the revenue hit, the company’s stock price is up from a year ago.
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.
Still, shareholders might wonder how much higher the stock price would be today with $150 million more in sales over the last year.
Stack made a political decision he knew would hurt the company’s bottom line. Shareholder lawsuits over such moves aren’t unusual. But according to directorpoint.com, that’s not an easy case to make.
The “business judgment rule” protects boards and board members from lawsuits for simply making bad choices. As LegalMatch shares, “The business judgment rule requires that courts defer to the board of directors in business matters.
The only exception to the business judgment rule is if shareholders can show that the board of directors engaged in fraud, illegal activities, or were grossly negligent while managing the corporation.”
In other words, boards are afforded the right to make bad business choices as long as there is evidence they were acting in good faith.
That doesn’t mean an opportunistic attorney or two won’t try to recruit some shareholders to try to make the case in court that Stack’s decision to alienate a good size segment of his customer base in order to make a political point was negligent and reduced the value of their shares. If that happens, Dick’s will spend even more of the company’s money defending itself, further hurting the bottom line.
I hope he signed his companies own death warrant.
Why?
His actions should result in thousands of employees, who had nothing to do with this decision, getting fucked out of a job? Millions in market value should be lost because one guy is a moron? That’s a mirror of an anti-gun position. One nutbar shoots up a place and we all have pay for his crimes.
It’s guilt by association. Fuck that.
Fire Stack and move on with a replacement who will do right by the company and it’s investor and call it a day. He’s the one who is guilty and deserves to pay for this. Some 16 year old girl with her first job as a cashier or some middle aged guy who’s hit hard times and just needs a paycheck shouldn’t be punished for the actions of one retard.
I worked at Dick’s for almost two years. Nobody at Dick’s is a career employee, they have the tenure of a McDonald’s employee. I did it because I was retired and enjoyed working in the “Lodge”. They all will find new jobs, since it’s retail, and again it’s the type of job that mostly retirees and college kid are engaged in. Mr. Stack is the majority holder of stock, his father founded the company, so it would be hard to fire him. I do question the 150 million dollar loss, since I believe it could be larger. If other similar companies have had growth during the same period, and will all things considered, the loss should be calculated using projected sales if they had not changed their business model…not selling evil black guns.
That doesn’t change the fact that some percentage of employees are probably working a second or third job at Dick’s to make ends meet and the disruption to their life if they abruptly lose their job at Dick’s could have serious negative ramifications on their life.
It’s not exactly ethical on Stack’s part to sit there and virtue signal in ways he knows are bad business decisions if it ends up costing some guy or gal their house or car or means they fall behind with creditors on little Susie’s medical bills.
I don’t want to see the company go under. I want to see it change it’s practices and do better for itself, employees, shareholders and the country at large. If they can play that part, which I would hope they can, then we should all hope that they do. Wishing failure on people is just sour grapes. I’d prefer they see the light before they fail.
Be careful how you apply armchair logic to financial decisions. Had Dicks profits increased after the gun ban then perhaps it would be the fiduciary responsibility for all retail CFOs/CEOs to drop guns from their stores.
What makes sense makes sense, right?
I wonder if certain investors such as Bloomburg himself are keeping the price up. In the end the boycott will play in market. Until then support your local gun shop and gun smith. If you have to at least go to Cabelas.
No Cabela’s can go to hell as bass pro shop is pro gun control of cancelling the CCW show as they were pressured to do so by the left socialist party. Go to your local gun shop or gun range even franchise ones like shoot point blank are better as they keep workers based on salesmanship and ethics. Best part of a range you frequent if the salesman tries to pull a fast one he has to see your face every weekend or two your in and knows their in deep shit.
Would you explain what your talking about? I realize that Bass Pro isn’t Cabelas but so far I haven’t seen anything that says they are against guns. They sell everything that the left wants to ban.
And like I said, support your local gun shop. Get to know them, most of them are good people.
Bass Pro bought Cabela’s in 2017 for, IIRC, $4 billion. So, really, they kinda are the same store. One just sells a lot more boats and fishing gear.
CCW carry show in a MAY issue state, how is was that a good idea from the start? Would have turned into a anti-gun rally. But hay, with luck they can go out of business too, but I don’t think it will be a win for the pro-gun side.
Also, Cabelas is no longer VISA but mastercard/capitol one. Not a good CC company. Just had to cancel my card due to fraudulent recuring charges. Had to talk to some indian dude with worse english than mine and basically was told too bad. Piss on BPS and cabelas.
Ass Pro has gotten rid of some of my favorite things at Cabelas. First, no more layaway. I have to use the credit card if I find something I want, and don’t want to pay for it on credit. They no longer do gun library holds. I used to be able to walk in and if I saw something I wanted, but didn’t have my documents to buy a gun, I would put it on hold. I lost out on a Colt M1917 pistol that was priced well and in good condition because of that. Then they ditched the bargain cave. Now you have to wander the store to find their bargain bins. They of course did this because they think you will buy something else. Guess what, I won’t because I wanted to check out the bargain bin. Now get off of my lawn!
I will NOT be shopping for firearms at Cabela’s any more because they will not remove trigger locks — which means I cannot evaluate trigger design nor verify basic firearm function (ensuring that the action cycles properly and that the trigger functions properly).
ALL of my firearm purchases now will be private transactions or purchases at local gun stores. And I will also purchase all of my ammunition at said local gun stores since I will not likely be going to Cabela’s for any apparent reason.
They only lost 1.7% in revenue. Surprised its that low.
I personally NEVER believe a seated CEO’s numbers…because its funny on how they seem to change 5 years later or when they leave the company and they REALLY review the books???
I am willing to be he lost more!
Yes. His job is to maximize the investors’ profit.
So now they admit their an overpriced clothing and way over priced exercise/sports equipment retailer. When Walmart is 1/3rd the cost of them as with Amazon Dick’s sporting goods is going to crash hard. They also just unemployed thousands of workers by cutting firearms and ammo sales which means those people who were in the gun area which cost Dick’s more because each of them has to be FFL certified to sell large quantities of ammo or any firearms that won’t be needed and an FFL costs $200 for 3yrs and $90 every 3 after that per gun counter worker. So they not only screwed over their employees they alienated every gun owner.
Amazon maybe, but Walmart?
Show me all the middle to higher end outdoor gear they sell at Walmart. It’s 1/3rd the price because it’s crap. Most of what Walmart sells is crap. I mean sticking to outdoor clothing here, North Face and UA aren’t fantastic but they’re decent. Knockoffs of merely decent stuff is total shit.
The one major brand of outdoor stuff Dick’s sells that’s worth consideration is Patagonia but Dick’s prices for that are not really competitive compared to a place like REI or numerous online retailers like MooseJaw or Backcountry which means Dick’s is where you try it on before you go buy it for 35% less somewhere else.
And Dick’s selection of Patagonia gear is crap too. They’ve gone for the Patagucci crowd that wants a mid-layer with a name brand tag on it rather than selling the stuff Patagonia makes that’s actually really nice but niche.
Don’t be Dicks. Doubling down on stupid.
Get woke. Go broke.
“Stack made a political decision he knew would hurt the company’s bottom line. “…no he didn’t. He was sure he wouldn’t lose any money. He should have asked Califonia Richard first.
“He was sure he wouldn’t lose any money.”
Wokeness will do that to people.
At the end of the day he’s still just a man; prone to bad judgement, poor decision making, and saying stupid stuff. That fact that he’s filthy rich and influential only amplifies those faults.
I’ll give him this though: I’d rather be rich and do/say stupid stuff, than be poor and do/say stupid stuff.
Is Michael Avenatti available ?
I laughed when I saw all the people claiming they would start shopping at Dicks.
Yeah, we really believe some fat middle aged cat lady will run right out to buy free weights and batting helmets. That would require you to get off of facebook first.
150 million, just one gunm sales store, in one year. I don’t know how much money the gov gets on firearrmz sales tax but it has to be substantial. With numbers like these I can’t see the gov really banning anything firegunms related. After all cigarettes, booze and cars kill more people then gunms, it’s all about the money. Maybe the gov wilk put some kind of special permit for these hi cap mags, more money.
Ted Kennedy’s car killed more people than all of my firearms combined.
Harsh. But fair.
And more people have died of arkancide than are probably posting on this topic.
And today’s winner of the internet is… Chadwick! Thank you and well done sir.
This business is between those that own ‘Dick’s’ and ‘Dick’s’ itself, the shareholders.
And no one else, quite frankly. If they want to cut their own throat by aggrieving fifty percent of their customer base. it’s their choice…
A March 2019 issue of Barron’s confirmed Bloomberg’s numbers but added that forward sales could suffer more. Well, that’s good news! Let’s hope the decline accelerates. I & fellow club members certainly don’t go near a Dick’s anymore.
As for Cabela’s/Bass Pro Shops, a long-time employee(s) at my Cabela’s of choice noted the once-strong firearms department is now considered by Bass Pro as the “…department in the far corner of the store…fishing equipment & boats are now receive a greater than before emphasis. You be the judge as to where Bass Pro stands when it comes to the shooting sports.
Depends on the location of the store which department gets the emphasis.
The decision is a breach of fiduciary responsibility only if a majority of shareholders say so. Shareholders do not receive apportioned profit payments, they receive shares and/or dividends. It is quite possible for stock price and dividends to rise, even as a company is losing money from operations/sales. A shareholder revolt is a very rare thing, and shareholders haven’t been investors since the dot-bomb era. Shareholders are playing the odds at the big casino, and long term interests in share price have all but disappeared. It is a matter of “What have you done for me lately?”, rather than “What are you doing to ensure the company is profitable and reliable over the next 10-20 years?
Won’t matter much what his board thinks. He owns the majority of all voting stock in the company. He actually created the board and they serve at his pleasure. If they don’t like his decision he has the authority to replace them on the spot.
Come on Dan….You must have a love affair with Dicks cus it seems you just can’t stop talking about them.
To me they have been dead & Buried along time ago, beside I have never been in one.
He is an economic moron but the stockholders may finish him off.
See my post about him.
He’s trying to stave off the problems hitting physical stores by building some sort of liberal hippy culture around the chain. The problem is, hikers and well-heeled hippies already have REI.
LL Bean covers a lot north of Poughkeepsie for the middle class and suburbanites so……. Dick move?
Brick and mortar stores are having a tough enough time as it is without alienating the customer base for virtue signaling. Bad enough to eliminate a part of your revenue stream, but then to double down and hire anti-gun lobbyists is certainly outside the realm of fiduciary responsibility.
Dick’s is dying. I shall live long enough to spit on their grave.
Dick’s stock is up and Ed Stack has a controlling interest in the company. I have no idea why the stock is up, but I do know that his controlling interest makes him very powerful.
Most powerful Dicks eventually suffer from ED. Nuthin left to say!
“Most powerful Dicks eventually suffer from ED. Nuthin left to say!”
Speak for yourself…
*snicker* 😉
“I have no idea why the stock is up, but I do know that his controlling interest makes him very powerful.
Perhaps the “rising tide raises all boats” phenomena is at work but the crummy boats eventually start to leak and sink (a.k.a. Dick’s). And, good riddance.
The “rising tide” isn’t having much of a salutary effect on most brisk-and-mortar retail.
Dick’s is somewhat of an outlier. I’m almost at the point where I believe what a previous poster wrote about the stock price being propped up by left-wing billionaires and their minions. I’d have to see the Form 4 and 13d filings to make that call.
Or they just have a weird overall client base.
I walk through a Dick’s on my way elsewhere on a pretty regular basis and they seem to do a pretty brisk business with the “soccer mom” types who haven’t heard of REI and don’t know much about online shopping for outdoor/fitness type gear.
A serious fisherman isn’t going to go to Dick’s. But the kind of person who eschews Walmart but doesn’t know about the local fishing stores in the area will go there. A person who wants a weight lifting set-up without paying a few grand for a nice one will go there. People who have kids that just got into soccer or hockey will go there.
We sort of assume that everyone knows Dick’s policies on guns or politics but most people aren’t that informed or don’t care and are not particularly savvy shoppers. That’s Dick’s target audience, people with some money who aren’t really serious about whatever they’re buying. You can tell that from their lineups and overall gear selection. You can pay an extra $50 for a sweater or a coat from a decent outdoors manufacturer at Dick’s but you’re not going to get a decent backpacking tent or even a decent hiking pack in most cases. Dick’s isn’t catering to the person who knows what they’re doing or shops wants the kind of a gear a company like Arc’Teryx, Black Diamond or Rab makes. They cater to the RV camper, not the serious backpacker or alpinist.
My last visit to Dick’s was the day before the new policy was announced and I’m not going back.
As to the Bass Pro / Cabelas situation I’m not surprised. My experience with Bass Pro is limited, but firearms didn’t seem to be as important a product line and now they are in the driver’s seat. My issue with the old Cabelas was that they had lots of stuff, but frequently not what I was looking for and the one I frequented most had a big distribution center a quarter mile away.
The new chain that impresses me the most is Sportsman’s Warehouse a western chain coming east, but touring local gun shops and ranges is still what interests me most.
Seems like a good question, one that I’m content to leave to lawyers to answer, though I personally would think that the answer would be yes.
Eh, Dick’s will figure this out eventually. The stockholders will put up with it or they won’t.
Stack lives and dies on whether or not he can convince them he’s making enough good business decisions. If the stockholders see more value in his virtue signal advertising than they see lost revenue, he’ll stay. If not, they’ll can him.
Pretty tough to fire the guy who holds the majority of all stock in the company he inherited from his Dad. He personally appointed the entire board and has the power to summarily dismiss them.
Yep, about as likely the Cowboys will fire Jerry Jones.
Tough but possible.
Even if it turns out to be impossible, why would the rest of us get our panties in a wad because some kid wants to shit in his own sandbox?
Invest elsewhere if you’re an investor, call the loss the price you paid for an education and move on. If you’re just a shopper, shop somewhere else. If you think you can get good products and a fair price or make money on the investment, go right ahead.
A couple of weeks ago I was in a Field and Stream in Ashville, NC. There was a crap ton of guns , including pistols. Was not shopping so did not note the prices.
Ed Stack, putting the “douche” in fiduciary duty!
The head Dick,virtue signaled,he and his company to irrelevancy as far as firearms and hunting goes.I will pull a cork in celebration the day he shutters his companies doors for good,couldn’t happen to a more deserving Dick.
I’m happy to say I haven’t been in Dick’s in almost a year, and the last thing I bought was a CamelBak product. For reference, CamelBak is part of Vista Outdoors along with Savage and Federal and was the victim of REI’s virtue signaling jihad last spring.
It’s noteworthy that Ed Stack, the Dick’s Head, was a lifelong Republican until he became a billionaire, gave $500,000 to the Dem(on)s and ran his daughter for Congress as a Dem — she lost — and started hanging out with Bloombag and the rest of those scumbergs.
He’s just another elitist pr!ck.
Ralph,
I am noticing a disturbing trend. It seems like a lot of the top-tier company executives become Progressive once they make their big money.
I think this is a destructive extension of the concept that socialism is only possible following vibrant capitalism. How many of these large companies would have grown into their current success had the entire socioeconomic environment been purely Progressive for the last 300 years? I am pretty sure the answer would be NONE.
No Dicks for us, we’re gun owners.
Timely article. I need new bag gloves and yesterday asked some friends at the gym for recommendations. One suggested going to Dicks. I laughed and said I passed on Dicks because they’re commie scumbags. They can’t go out of business fast enough for me.
Not stepped foot into DICK’s since the company politicized their business model.
Crash and burn DICK’s. Hopefully 2019 is the end of the road for this company.
Ya! but dicks Head will not lose anything!
And that’s what I call a LOSING STACK of DICKS!
May the online retailers crush you out……
A-freaking-MEN!
Dick’s Sporting Goods just beat earnings and same-store sales are up 6% which is best performance since they went public in 2013 so it seems the brand loyalty the assault weapons ban has created ended up benefiting them after all.
https://www.marketwatch.com/story/dicks-sporting-goods-decision-to-remove-guns-was-big-factor-in-earnings-beat-cfra-2019-11-26?mod=home-page
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