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Dick’s Opens Six-Month Popups Offering 90% Off

As pandemic product piles up, some retailers seem to be getting creative about clearing out their surplus stock.

Although 80 percent of Dick’s Sporting Goods’ 851 stores have reopened as of May 30, the retailer is adding to its fleet by eight to sell off product that went unsold during the COVID-19 pandemic. The retailer has launched two new store concepts heavily featuring deep discounts: Overtime by Dick’s Sporting Goods and Dick’s Sporting Goods Warehouse.

Overtime by Dick’s Sporting Goods locations will offer an assortment of apparel, footwear and equipment at up to 75 percent off Nike, Adidas, Under Armour and other major athletic wear brands. New markdowns will be added throughout the year in an effort to keep inventory at these outlet centers fresh for shoppers. Three stores have opened in Connecticut, Maryland and Pennsylvania with plans to operate in these communities for the foreseeable future.

Meanwhile, five temporary Dick’s Sporting Goods Warehouse locations will offer deeper discounts on footwear and apparel brands at up to 90 percent off. These clearance stores, which opened in Indiana, Missouri, Ohio, Pennsylvania and Wisconsin, will only be open over the next six months.

The retailer opened three “clearance centers” last year, located in Utica, Mich., Spartanburg, S.C., and Racine, Wisc. With these openings, Dick’s will have 11 outlet and clearance centers open in nine different states.

Although it took a writedown on $28 million in inventory for the first quarter due to store closures, Dick’s Sporting Goods saw total inventory decrease 2.1 percent during the quarter, which indicates the pandemic didn’t force the company into carrying an overabundance of merchandise. CEO and chairman Edward Stack referred to the health of the retailer’s footwear and apparel businesses as “very good” in the company’s earnings call, and said he was “really happy” with the company’s present inventory position.

“We feel great about our inventory position where when we’re chasing inventory, we’re actually buying some off-price inventory from some of the brands that, for whatever reason, they have available,” said Stack.

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Nevertheless, the introduction of a temporary retail model suggests that Dick’s is looking to offload at least some of what it couldn’t sell in stores as quickly as possible, especially with such a high-percentage markdown number being advertised.

Seasonality could play a role here as well. Dick’s was “pretty aggressive” with online promotions in the first few weeks after the stores closed to clear out unsold winter merchandise due to a lack of cold weather, Lee Belitsky, executive vice president and chief financial officer of Dick’s, said on the earnings call. With first-quarter sales down 30.6 percent, a similarly aggressive promotion plan could play out for the retailer’s unsold spring and summer items in the new stores.

The move also could be used to prevent Dick’s from resorting to markdowns or showcasing aged items at its regular, full-price locations as it attempts to recover sales lost during the pandemic.

Launching temporary store concepts to jumpstart sales is one of the ways more retailers are trying to shed inventory in the wake of the coronavirus crisis. This past month, U.K.-based luxury department store Harrods launched a temporary concept store within a two-story, 80,000-square-foot space in Westfield London to get rid of excess stock it was unable to sell while the outbreak closed stores.

The outlet store, a first for Harrods, sells discounted stock left over from the spring season as part of its annual end-of-season summer sale, which typically is one of its most popular and crowded events. With the outlet selling discounted stock, Harrods can offer a wider product selection of new-season products at its mainline store.