Dick’s Sporting Goods continues to experiment with store formats as it prepares to open six namesake banner stores, two hybrid locations merging the Dick’s and Golf Galaxy nameplates, and three Dick’s Sporting Goods Warehouse Sales locations this month.
With the opening of the new stores, Dick’s will be hiring approximately 400 total full-time, part-time and temporary associates. Following these store openings, Dick’s will operate 732 Dick’s Sporting Goods stores, 97 Golf Galaxy stores and 14 Warehouse Sale locations nationwide in 47 states.
Unlike the traditional locations, Dick’s Sporting Goods Warehouse Sale locations will offer deep discounts between 30 percent and 75 percent off original prices on footwear and apparel.
The retailer also will open a limited number of Soccer Shops starting later this month, starting with the first location on Oct. 23 in Leawood, Kan. Additional shops are expected to open next month.
And the Soccer Shops are a completely new concept for the retailer as it specifically caters to the soccer player demographic. The stores will feature an expanded selection of equipment and gear, including cleats, apparel, training aids and national and club team jerseys for fans to support their favorite teams. Within the stores, soccer experts will be specially trained to help customers find the equipment they need and the right fit for their cleats.
Earlier this year, the sporting goods retailer launched two new store concepts heavily featuring deep discounts as a means to offload excess inventory: Overtime by Dick’s Sporting Goods and the first batch of Dick’s Sporting Goods Warehouse Sale stores, which were temporary and will close by the end of the year. These versions of the Warehouse Sale stores offered items of up to 90 percent off.
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Dick’s has three Overtime stores at the moment, but agreed to put additional stores on hold while it battles a lawsuit from online sports network Overtime, which is suing for trademark infringement.
The outlet locations are still in the test phase, CEO Ed Stack noted in Dick’s second-quarter earnings call.
“We don’t have many of them out there, but they can take a lot of the clearance merchandise and we can get it out of…the traditional stores and make room for the new product, which really is another thing that’s helping our margins,” Stack said. “And we’re able to realize a higher-margin rate in these stores than if we kept it in our store and tried to clean it out. So…it’s early on, we’re really pleased with what’s going on here with these stores.”
If the new formats are driving results, Dick’s might add even more of these experimental concepts, especially if they help to not only sell more products but enable a constant flow of new merchandise.
The measures to eliminate unsold inventory have paid dividends, with second-quarter inventory levels dipping 12.2 percent, from $2.14 billion at the end of the same period last year to $1.88 billion this year. Overall, that quarter broke records with net sales of $2.71 billion—a 20.1 percent net increase—and earnings of $276.8 million.
The newest Dick’s stores will open in Lynchburg, Va., Happy Valley, Ore., Annapolis, M.D., Wilmington, N.C., Modesto, Calif. and Houston, Texas. The Dick’s/Golf Galaxy hybrid locations will open in Canton, Ohio, and Fairfax Va., while the Warehouse Sale stores will open in Monroeville, Pa., Olathe, Kan. and Royal Palm Beach, Fla.
Dick’s is also extending the perks of its loyalty program to host “7 Days of ScoreCard,” which will serve as the retailer’s Loyalty Appreciation Week and the program’s biggest event of the year, to reward its ScoreCard and Scorecard Gold customers. The ScoreCard program has more than 20 million active users and accounts for more than 70 percent of the company’s sales.
From Oct. 5-11, loyalty members have daily opportunities to earn bonus points while shopping. From Oct. 4, ScoreCard Gold members can earn triple the points on a single purchase once per year.
“We have a big push behind our ScoreCard program,” Lauren Hobart, president and director of Dick’s Sporting Goods, said in the second quarter earnings call. “We’ve recently, in the past year, launched the Gold program to reward our best customer and just keep driving a benefit to them that’s better than the standard ScoreCard or the standard customer benefit. So we’re driving membership.”