Tak­ing a stand against firearms

Dick’s CEO de­fends pulling guns de­spite ini­tial money losses

Baltimore Sun Sunday - - MARYLAND - By Rachel Siegel

WASH­ING­TON — Af­ter 17 peo­ple were gunned down at Mar­jory Stone­man Dou­glas High School in Florida, Dick’s Sport­ing Goods CEO Ed Stack said he was re­mov­ing all as­sault­style weapons from com­pany stores.

Those un­sold guns not only came off the shelves, but off the streets. Rather than re­turn the in­ven­tory to man­u­fac­tur­ers, Dick’s de­stroyed about $5 mil­lion dol­lars worth of the weapons, turn­ing them into scrap me­tal.

Stack has brought gun re­form to the cen­ter of his role as CEO. In the past year and a half, Dick’s has over­hauled its gun sales poli­cies, most re­cently pulling all guns out of more than 100 stores. And even while the Na­tional Ri­fle As­so­ci­a­tion, Re­pub­li­can law­mak­ers and crit­i­cal cus­tomers have blasted Stack, he says that the com­pany’s en­tire firearms cat­e­gory is un­der “strate­gic re­view.”

“We said, ‘The sys­tem is bro­ken, we need to stand up and say some­thing,’ ” Stack told CNBC this week. “If you have an ex­per­tise on this, and you feel that it’s im­por­tant to say, you should stand up and say it.”

Tues­day marked the re­lease of Stack’s mem­oir, in which he tracks the com­pany’s evo­lu­tion from a mod­est re­gional chain to one of the big­gest play­ers in the $70 bil­lion sport­ing goods mar­ket. Stack of­ten turns to gun re­form as a par­tic­u­larly ur­gent is­sue fac­ing his com­pany, cor­po­rate Amer­ica and the na­tion.

Last month, Stack joined 145 CEOs who pressed Se­nate lead­ers to ex­pand back­ground checks to all firearms sales and en­act stronger “red flag” laws. Sig­na­to­ries to a let­ter in­cluded the heads of ma­jor re­tail­ers, tech firms and fi­nan­cial in­sti­tu­tions, from Levi Strauss to Twit­ter to Bain Cap­i­tal.

Im­me­di­ately af­ter the Park­land shoot­ing in Fe­bru­ary 2018, Stack raised the pos­si­bil­ity of get­ting Dick’s out of the gun busi­ness al­to­gether. In his mem­oir, Stack de­scribes days of in­ter­nal de­bates about the fi­nan­cial risk of such a move. Even if the mar­gin rate on guns wasn’t ter­ri­bly strong at Dick’s, the com­pany knew that hunters didn’t only buy guns, but also hunt­ing coats, boots, socks and other items. Plus, hunt­ing had been a main­stay of its busi­ness since the com­pany’s ear­li­est days.

“If we stopped sell­ing guns al­to­gether, we’d be pun­ish­ing those cus­tomers, some of whom had been with us for sixty years — men and women who knew to treat firearms with re­spect and who used them for le­git­i­mate sport,” Stack wrote. “Did it make sense to need­lessly alien­ate loyal Dick’s cus­tomers who bought shot­guns and deer ri­fles, and were law-abid­ing and do-right cit­i­zens?”

Ul­ti­mately, Dick’s pulled all as­sault-style weapons from its stores, banned high-ca­pac­ity mag­a­zines and “bump stocks” that could ef­fec­tively con­vert semi­au­to­matic weapons into ma­chine guns. Stack also an­nounced that Dick’s would not sell firearms to peo­ple younger than 21.

But that strat­egy didn’t cush­ion the com­pany en­tirely.

The pol­icy changes af­ter Park­land cost the com­pany about a quar­ter of a bil­lion dol­lars, Stack told CBS News. (The com­pany has never dis­closed what share of its sales come from gun sales alone.) For the fis­cal year end­ing Feb. 2, 2019, same-store sales fell 3.1%, ac­cord­ing to com­pany earn­ings, with Stack blam­ing much of the slump on gun is­sues. Cus­tomers boy­cotted the com­pany, and more than 60 em­ploy­ees quit.

But there’s ev­i­dence of a turn­around.

In Au­gust, Dick’s an­nounced that same store sales jumped 3.2% in the sec­ond quar­ter — its strong­est show­ing since 2016 — and the com­pany raised its full year guid­ance.

Some of the com­pany’s crit­ics charge that Stack and Dick’s op­pose Sec­ond Amend­ment rights, or that lim­it­ing sales of as­sault­style weapons means that all weapons will even­tu­ally be banned. The NRA on Mon­day tweeted a Bre­it­bart story about Dick’s de­stroy­ing its un­sold as­sault style ri­fles “to keep them out of pri­vate hands.”

Demo­cratic pres­i­den­tial can­di­date and former con­gress­man Beto O’Rourke, D-Texas, who ad­vo­cates for a ban on as­sault weapons and also a manda­tory buy­back, shot back. “Dick’s Sport­ing Goods is do­ing more to keep Amer­i­cans safe from as­sault weapons than Congress,” O’Rourke tweeted.

Amer­ica’s largest re­tail­ers have drawn par­tic­u­lar scru­tiny for their gun poli­cies. Af­ter 24 peo­ple were killed in shoot­ings at Wal­mart stores this sum­mer, the com­pany an­nounced it would stop sell­ing am­mu­ni­tion for mil­i­tary-style weapons and no longer al­low cus­tomers to openly carry firearms in stores. Other re­tail­ers also changed their open-carry poli­cies, in­clud­ing Kroger, CVS and Wal­greens.

Law­mak­ers may be stalled on ma­jor gun leg­is­la­tion, but there is broad pub­lic sup­port for change.

A re­cent Wash­ing­ton Post-ABC News poll found Amer­i­cans over­whelm­ingly sup­port ex­panded back­ground checks for gun buy­ers and al­low­ing law en­force­ment to tem­po­rar­ily seize weapons from trou­bled in­di­vid­u­als. The poll found 86% of Amer­i­cans sup­port im­ple­ment­ing “red flag” pro­vi­sions that al­low guns to be taken from peo­ple judged to be a dan­ger to them­selves or oth­ers. In ad­di­tion, 89% sup­port ex­pand­ing fed­eral back­ground checks to cover pri­vate sales and gun-show trans­ac­tions.


Dick’s Sport­ing Goods CEO Ed Stack holds a copy of his mem­oir Tues­day af­ter ring­ing the open­ing bell at the New York Stock Ex­change.

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