What the Dick's gun decision really means

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What the Dick's gun decision really means

By Mike Troy - 02/28/2018

Dick’s Chairman and CEO Ed Stack has suddenly become an outspoken proponent of gun control, but the action isn’t as courageous as it seems.

Dick’s Sporting Goods is a major seller of firearms and it will continue to be despite the retailer’s announcement that it would stop selling assault style rifles and high capacity magazines at its 35 Field & Stream stores. Various other types of shotguns and rifles, known in the retail sporting goods world as long guns, will remain a key offering within the outdoor department at Dick’s stores. The statement from Stack also implores elected officials to pass legislation that would require universal background checks and create a national database of those banned from buying firearms. The company also supports closing a loophole that allows those engaged in the private sale of firearms at gun shows to avoid background checks.

While control advocates cheered the move and the fact that a high profile executive within the sporting world spoke up on the issue, the decision should have been an easy one for Dick’s to make. It had already discontinued the sales of assault style weapons at its flagship Dick’s stores after a shooting at Sandy Hook Elementary School in Newtown, Conn., in 2012. After the shooting at Marjory Stoneman Douglas High School in Parkland, Fla., on Feb. 14, Dick’s realized it had sold a shotgun to the shooter last November. It wasn’t the weapon the shooter used to kill 17 people, but had it been the negative publicity heaped on Dick’s Sporting Goods would have been devastating to the company’s image and sales results.

Dick’s couldn’t afford for that to happen and unfortunately no one believes there won’t be another mass shooting somewhere given the volume of guns already on the street and prevalence of mental health issues. Instead, Dick’s is walking away from what can only be assumed is a relatively small amount of sales and aligning itself with an issue where it knows there is considerable public support, namely background checks and restrictions on powerful weapons that aren’t used for legitimate hunting purposes. From a risk aversion and business continuity standpoint, key considerations at the board level, it was a safe move and if there were any meaningful financial implications Dick’s would presumably have disclosed the projected impact on earnings per share for the first quarter or the coming year. It did not, but fourth quarter results aren’t due out until mid-March so perhaps the company will put a finer point on the sales and profitability impact at that time.

The impact could well be favorable, as the negligible sales lost by discontinuing a few products at fraction of its overall store base could be more than offset by the goodwill generated with families who shop for their kids’ shoes, team sports equipment, fishing and golf gear and steer clear of the hunting department tucked away in the back corner of Dick’s stores.

Was the move by Stack courageous? More so than other gun retailers because the publicity shy executive actually took a stand on the issue and appeared on a national television network that openly advocates for gun control.  In financial terms it was an easy decision to make, which wasn’t the case at a company such as CVS Health which discontinued sales of tobacco products five years ago. That decision, the right move long term for a company with the word “health” in its name, but it had a devastating impact on same store sales in 2014 and 2015 and a huge impact on earnings. The retailer’s non-pharmacy sales in its close to 10,000 stores have been negative for the past five years which surely would not be the case if it still offered tobacco products and was benefitting from the sales and traffic the category generates.

The full statement of Dick’s CEO Ed Stack is below.

We at DICK’S Sporting Goods are deeply disturbed and saddened by the tragic events in Parkland. Our thoughts and prayers are with all of the victims and their loved ones.

But thoughts and prayers are not enough.

We have tremendous respect and admiration for the students organizing and making their voices heard regarding gun violence in schools and elsewhere in our country.

We have heard you. The nation has heard you.

We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens. But we have to help solve the problem that’s in front of us. Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America – our kids.

Following all of the rules and laws, we sold a shotgun to the Parkland shooter in November of 2017. It was not the gun, nor type of gun, he used in the shooting. But it could have been.

Clearly this indicates on so many levels that the systems in place are not effective to protect our kids and our citizens.

We believe it’s time to do something about it.

Beginning today, DICK’S Sporting Goods is committed to the following:

·We will no longer sell assault-style rifles, also referred to as modern sporting rifles. We had already removed them from all DICK’S stores after the Sandy Hook massacre, but we will now remove them from sale at all 35 Field & Stream stores.

·We will no longer sell firearms to anyone under 21 years of age.

·We will no longer sell high capacity magazines.

·We never have and never will sell bump stocks that allow semi-automatic weapons to fire more rapidly.

At the same time, we implore our elected officials to enact common sense gun reform and pass the following regulations:

  • Ban assault-style firearms
  • Raise the minimum age to purchase firearms to 21
  • Ban high capacity magazines and bump stocks
  • Require universal background checks that include relevant mental health information and previous interactions with the law
  • Ensure a complete universal database of those banned from buying firearms
  • Close the private sale and gun show loophole that waives the necessity of background checks

We hope others join us in this effort to let our kids know that their pleas are being taken seriously.

Some will say these steps can’t guarantee tragedies like Parkland will never happen again. They may be correct – but if common sense reform is enacted and even one life is saved, it will have been worth it.

We deeply believe that this country’s most precious gift is our children. They are our future. We must keep them safe.

Edward W. Stack
Chairman & CEO
DICK’S Sporting Goods

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