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Dick’s Takes on Lulu and Rhone With Premium Men’s Apparel Line

In a recent fourth-quarter earnings call, Dick’s Sporting Goods CEO Lauren Hobart touted the retailer’s vertical brands as a “significant source of strength” for the company. And she was on point: the brands surpassed $1.3 billion in sales during 2020 and outperformed comparable products by 4 percentage points on average.

Dick’s is looking to build on the success of these brands with the launch of its newest premium men’s athletic apparel brand, VRST, designed for modern, active men who “live life on the go” and playing in the same space as a newcomer brand like Rhone. Available exclusively on VRST.com and dicks.com, VRST will roll out to more than 400 Dick’s Sporting Goods stores nationwide over the coming weeks.

Hobart said in the call that VRST will put Dick’s “in a much stronger position to compete with similar offerings from premium apparel brands and specialty athletic apparel stores.”

Key pieces in the apparel line include a variety of commuter pants, joggers and shorts along with tees, hooded sweatshirts and quarter-zips. VRST items range in price from $30 to $120, with multiple inseam and waist sizing options outside of standard sizes S-XXL.

“We believe [VRST] is very much a white space in our stores right now,” Hobart said in the call. “It’s competing with other specialty, but we do believe when you see it…it’s a very different product assortment from what we have with our core vendor partners right now. And it is the white space. You can think of it sort of as the CALIA (women’s brand) version on the men’s side in terms of filling a white space that we have that our current partners are just not.”

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VRST will be one of only two brands sold exclusively at Dick’s Sporting Goods to have its own e-commerce and digital platforms, joining CALIA, which was formed in partnership with country singer Carrie Underwood.

“The VRST line leverages our expertise in athletic apparel, technology and the in-house design capabilities we have been building over several years,” Nina Barjesteh, senior vice president of product development, Dick’s Sporting Goods, said in a statement. “VRST not only offers sophisticated performance apparel for running and training, but also comfortable, stylish pieces with premium fabrication that can be worn around town, out with friends or while working or working out at home.”

Lee Belitsky, executive vice president and chief financial officer of Dick’s Sporting Goods, emphasized the “lifestyle” aspect of the brand in the earnings call, expressing that the brand is closer to Lululemon’s product than to Nike or Under Armour due to its all-purpose intent, whether for working out, working, lounging or traveling.

“You can work out in it if you choose to,” Belitsky said in the call. “So it covers a broader range of activities than Nike, which is a little bit more athlete focused than our new brand that’s coming out.”

During 2021, Hobart says Dick’s will further invest in improving the strength of its vertical brands, in an effort to enhance space in store, increase marketing efforts and expand into additional product categories.

The company’s DSG brand finished the year as its largest vertical brand, while CALIA was the retailer’s second-largest women’s athletic apparel brand only behind Nike.

In total, Dick’s vertical brands together represented the company’s largest labels in golf, fitness, outdoor equipment and team sports.

While the company continues to push its private brands, it is also furthering one of its major supply chain relationships to ensure that it can continue to expand its online assortment elsewhere.

Dick’s recently signed a multi-year extension agreement with e-commerce enablement platform CommerceHub, to help strengthen its digital supply chain, continue to fulfill e-commerce orders quickly and grew its online business.

Partnering with CommerceHub since 2015, Dick’s credits its ability to keep pace with accelerated customer demand to the platform’s digital fulfillment capabilities, particularly its vendor direct program.

“Our vendor direct fulfillment network powered by CommerceHub continues to help us expand our assortment by allowing us to quickly connect with key vendor partners,” Scott Casciato, vice president of omnichannel fulfillment and athlete services, Dick’s Sporting Goods, said in a statement. “We rely on CommerceHub to scale our digital capabilities within our supply chain; this, along with the opportunity to offer an ‘endless aisle,’ allows us to continue to meet our customers’ evolving and shifting needs.”

The news of the both the VRST launch and the CommerceHub partnership extension comes after another excellent quarter for the sporting goods giant to close out 2020. Dick’s reported income of $219.6 million, or $2.21 per share, for the quarter ended Jan. 30, up from $69.8 million, or 81 cents per share in last year’s fourth quarter. Adjusted EPS of $2.43 topped analysts’ estimates of $2.30.

Net sales rose 19.8 percent to $3.13 billion, topping analysts’ estimates of $3.07 billion. Same-store sales jumped 19.3 percent, also more than expected. E-commerce sales increased 57 percent, accounting for about 32 percent of the quarter’s total sales.

Same-store sales for the sporting goods giant rose 9.9 percent for 2020, but the company expects that same-store sales for fiscal 2021 will range from a loss of 2 percent to a 2 percent increase.

Dick’s has plenty more on its plate, with anticipated 2021 capital expenditures totaling $275 million to $300 million. This will largely be concentrated in improvements within the company’s existing stores, as well as the opening of six new Dick’s stores, six new specialty concept stores, and the conversion of two Field & Stream stores into Public Lands stores, the company’s outdoor pilot concept.

One of the new specialty stores, called the House of Sport, recently opened in Victor, N.Y., and is one of two locations that are designed to focus on service and community, reflecting what the retailer boasts as “The New Dick’s Sporting Goods.”

Originally billed as the Ecosystem Of The Future (EOF), the experiential test and learn concept includes a playing field where high school teams can practice, a rock climbing wall, a golf pro shop, batting cages, a “house of cleats” where shoppers can try on cleats on both turf and running track environments and a health and wellness section.

Another House of Sport store is set to open in May in Knoxville, Tenn.