Shopping Centers Today

DEC 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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46 S C T / D E C E M B E R 2 0 1 6 for better profitability and better customer-data management. At the same time, the company reached licensing and distribution agreements with highly vaunted companies like Nike and Under Armour, making Dick's something of a boutique destination. Though its customers can go to Target or Walmart or for bats or gloves or soccer balls, they cannot buy that newest pair of Nike Zoom LeBron Soldier 10 shoes or any Under Armour Swacket hoodies at those places. In the sporting-goods market, brands do matter. "A lot of our customers are 14- to 24-year-old males, who are not buying clothes for look or color or fit," said John Horan, publisher of industry tracker Sporting Goods Intelligence. "They are buying a logo. That's kept the sporting-goods business a little unique." As a result, Dick has revamped its strategy in recent years to focus more on the sportswear and footwear market. Because of its cash flow, Dick's had the flexibility and nimbleness to adapt to these changes. Sports Authority, its biggest competitor — and for a long time the largest sports retailer — was straining to compete, saddled with at least $643 million in debt, a consequence of the $1.4 billion leveraged buyout in 2006 on the part of investors led by Leonard Green & Partners. Thus, Sports Authority had very little money to invest in e-commerce or store upgrades. "All you had to do was walk into a Sports Authority store, then walk into a Dick's Sporting Goods store," said McGrail. "From the lighting to the fixtures to the flooring to the layout, it was just a much better shopping experience." And vendors can smell impending death. "When they start to feel like a company is failing, they require more-aggressive payment terms and tighten up on credit," McGrail said. Sports Authority closed officially in July. Dick's, as expected, has been feeding on the remains of its former competitor. But in a sign of how truly saturated the sporting-goods market was, it picked up only 31 of Sports Authority's 200 leases, Horan notes. What Dick's was most interested in was Sports Authority's database, brand name and intellectual property, all of which it acquired for $15 million, beating out Sports Direct International. Today customers who visit the Sports Authority e-commerce site are redirected to the Dick's Sporting Goods website — a move that helped increase visits to Dick's website by 73 percent in August, according to published reports. All this has made Dick's the market golden boy. In early October shares of Dick's Sporting Goods earned a consensus rating of "buy" from the 35 brokerages now covering the firm. Not to say that there is room for complacency — UBS analysts warn that Dick's is not invulnerable to the sorts of struggles such retailers as Macy's and Gap are facing. And sales at Golf Galaxy, which Dick's also owns, fell by about 4 percent in the second quarter. Even so, Dick's seems fairly tranquil. The company celebrated the opening of its first Houston store in October with a guest appearance by seven-time Grammy winner Carrie Underwood — who in June announced she would be offering her Calia by Carrie Underwood athletics wear and accessories line exclusively at Dick's stores. n Dick's has revamped its strategy in recent years to focus more on the sportswear and footwear market. Young male customers shop more for logos than for size or fit ADIDAS IS SENDING THE REEBOK BRAND BACK TO THE GYM FOR A WORKOUT According to Adidas CFO Robin Stalker, the firm plans to reduce its Reebok factory outlet store count by half to about 20 stores by year-end. More store closures loom in 2017 for the brand, Stalker said in a third- quarter earnings call. Adidas, which acquired Reebok in 2005, says it will focus on growing the business with wholesale partners . S T O R E F R O N T S

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