(Bloomberg Opinion) -- Dick's Sporting Goods Inc. started as a single store in Binghamton, New York, catering to fishermen. In short order, the owner, Dick Stack, added hunting gear, including rifles. When Dick's son Ed began working for his dad as a teenager, handling rifles was part of his job. Guns were second nature.
By his early 20s, Ed Stack was essentially running Dick's (though his father remained the owner). Once he hit 30 and was fully in charge, he embarked on an expansion that's never ended: Dick's now has around 750 stores, which generated $8.5 billion in revenue in its last fiscal year.
For most of that time, guns were an important category for Dick's. But the 2012 massacre at the Sandy Hook Elementary School in Newtown, Connecticut, which took the lives of 20 children and seven adults, shook Stack to his core. He decided to pull assault rifles from Dick's shelves, though he kept relatively quiet about the move.
Six years later, after the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, Stack was again moved to act. A smaller chain, an offshoot of Dick's called Field & Stream, had continued to sell assault weapons. Out they went. Stack also announced that Dick's would no longer sell high-capacity magazines and wouldn't sell guns to anyone under 21. He did one other thing: He went public, granting several television interviews, inviting controversy he had previously avoided.
Stack is out with a new book, “It's How We Play the Game.” For the most part, it is a classic chief executive's memoir, a tale of success with roadblocks along the way. But the last few chapters detail the difficult decisions he — and Dick's — have made around guns these last few years. What follows is a lightly edited and condensed version of a conversation we had about guns late last week.
Joe Nocera: Do you still have guns in your stores?
Ed Stack: We got rid of the kind of guns that were used at Sandy Hook and Parkland. The guns we have today are really for hunting and clay and trap shooting. We did a test with 10 stores recently and eliminated the hunting department to see what would happen if we replaced it with merchandise that we thought would work better in those communities. And we were surprised at just how well those stores did. Earlier this year we took the hunting department out of another 125 stores to see how that would go. And we aren't putting any firearms in new stores. There are now about 200 stores without any firearms. As we said in our last quarterly call, the whole category is under strategic review.
JN: For most of your career, selling guns was a given. Did the popularity of assault weapons give you pause?
ES: I never liked the idea of those guns, and we didn't put them in. Then they were banned from 1994 to 2004. When the ban expired, I still resisted putting them in. We finally started stocking them maybe 12 to 18 months before Sandy Hook. And when Sandy Hook happened, I said, “We're done.” We took them out of the Dick's stores. We said we were suspending the sale of modern sporting rifles. But we never put them back in.
JN: A lot of people were galvanized by Newtown but their passion eventually faded until Parkland. Did that happen with you?
ES: For me, it never went away. After Sandy Hook, we worked for several years on a concept called Field & Stream, which was a specialty hunt, fish, and camp store. We had a lot of debate about whether we were going to put those weapons in those stores. I reluctantly agreed to do it because if we didn't we wouldn't be credible in that space. Whenever there was a shooting, whether San Bernardino or the Pulse nightclub in Orlando, it would weigh on me. To the point where we said, we shouldn't advertise these guns anymore. Then came Parkland. That's the point where I said, “We're done. We're going to stand up and talk about this.” We thought we were in a position to do that as one of the largest firearms dealers in the country.
JN: Obviously, you had to know you were going to take a financial hit once you stopped selling assault weapons. How did you think about your responsibility to shareholders versus your responsibility to society?
ES: Once we knew what we were going to do, our CFO said we needed to figure out the financial ramifications so we could inform Wall Street. I said, “You're right we need to do that. But I don't care what it is, we are going to do this anyway.” We told the Street we would likely take a $250 million hit, and that's pretty close to what it was. You talk about the shareholders. My family and I are the largest shareholders, and we control the vote. We felt this was the right thing to do for the community and we thought it was the right thing to do for the company long term. Maybe not short term, but long term.
JN: How did Wall Street react?
ES: We never had a major shareholder saying what you're doing is crazy. But we also never had any of the so-called socially responsible investors call and say I'm buying your stock because of what you did.
JN: It's well-known that you got a lot of blowback from customers who felt you were trampling on the Second Amendment. What other kind of resistance did you get?
ES: The ones who were really upset with us were the firearm brands. A number of them cut us off. I invited all the gun manufacturers to a meeting. Only a few came. A couple of them sent notes saying I'm not coming and what's more I'm not going to sell to you anymore.
JN: Have you ever talked to any of the people trying to develop so-called smart guns, which can only be used by their owners?
ES: I think the idea of a smart gun is great. I've told a couple of the people who are working on them if you bring it to market, and we think the technology has been perfected, we'll stock them. If we're still in the gun business, that is.
The book's full title is “It's How We Play the Game: Build a Business. Take a Stand. Make a Difference.”
“Modern sporting rifle” is the term the industry uses for assault rifle.
To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
©2019 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
