If you like going to Dick’s Sporting Goods store for specific items, you’re going to want to think twice before heading there. The Pittsburg-based retailer has decided to eliminate one-fifth of the brands they care to make way for more of their own private-label apparel and sports gear.
10 of the company’s best selling brands, like Nike, Adidas and Rebok won’t be impacted. The company has yet to name which brands will be pulled.
“We have decided that we have got to pull the trigger, we’ve got to do this,” Edward Stack, chief executive officer of Dick’s Sporting Goods, told The Wall Street Journal. “And it’s difficult to do. It’s difficult to tell people we have done business with for a long time that we are not going to do business going forward.”
According to Stack, the vendors being cut are ones the company feels have been tapped out and have reached their peak.
“These are vendors that we think don’t really have significant growth going forward,” Stacks told MarketWatch. “But there will be a combination of some of this [that] will go to existing vendors that we’re going to partner with, and part of this will go to our own private brands.”
Although Dick’s had a stellar fourth-quarter, profits were significantly impacted by the 20 percent increase in overhead costs associated with inventory and flipping competitor stores that were purchased during a bankruptcy.
“We have identified the merchandise that doesn’t fit within this vendor and assortment strategy and have taken a $46 million charge to write it down,” Stack told MarketWatch.
The company’s focus will now be on growing in-house brands, like Calia by Carrie Underwood, which Stack anticipates to drive business upwards of $1 billion this year alone.
Stack made it very clear that the size of their stores will remain the same but their focus will be on more internal products. After conducting the review, three of Dick’s Sporting Goods 676 stores and 10 Golf Galaxy stores were closed.