Dick's Sporting Goods destroyed $5 million worth of assault weapons - and its CEO tells us the gun industry's blowback has been 'a blessing in disguise'
- Dick's Sporting Goods destroyed $5 million worth of assault weapons in 2018 after banning them from its Field & Stream hunting and fishing stores in the wake of the Parkland shooting. Dick's banned them from its signature big box stores in 2012 following the Sandy Hook massacre.
- Dick's CEO Ed Stack spoke with Business Insider about his company's pivot away from the gun business.
- Stack called the changes his team made after the AR-15 move a potential "blessing in disguise," due to better sales performance in stores where hunting was removed and market-specific bestsellers expanded.
- This article is part of Business Insider's ongoing series on Better Capitalism.
- Visit Business Insider's homepage for more stories.
Dick's Sporting Goods destroyed $5 million worth of "assault-style rifles," semi-automatic rifles like the AR-15, last year after it stopped selling them at all of its stores.
"We had a fair amount invested in these guns," Dick's CEO Ed Stack told Business Insider on Tuesday. The company announced last April that it destroyed the guns it no longer sold, but Stack only just now disclosed the value of the destroyed guns in his new book, "It's How We Play the Game."In the wake of the 2012 Sandy Hook massacre (which left 26 people, including 20 children, dead), Dick's stopped selling assault weapons at its big box stores across the country. But it continued to sell the AR-15 and similar rifles at its Field & Stream hunting and fishing specialty stores. After the Stoneman Douglas High School shooting in Parkland, Florida, in February 2018 left 17 dead, Stack decided Field & Stream would follow Dick's lead. As the largest sporting-goods retailer in the United States, its commitment was a big deal for the industry.
Stack told us he had the option to send the weapons his store removed back to the manufacturer for a refund between 80% and 85%. Another possibility would be to quickly liquidate the merchandise through discounts. Neither choice aligned with the company's intentions.
"We're in this meeting and I said, 'We can't do that,'" Stack said. "We think these guns should be outlawed. We think that the ban that was in place between 1994 and 2004 should be reinstated."
Stack said that if Dick's decided to sell off the remaining guns or send them back to the manufacturers, the result would be the same: the firearms would "end up back out on the street.""I said, 'The only thing we can do with them is destroy them,'" Stack said. "So that's what we did. We destroyed them all."
Dick's received praise from gun-control advocates, but the blowback was fierce. Firearms manufacturers, including those that do not manufacture assault weapons, ended their relationship with the company. The National Rifle Association (NRA) and its supporters publicly bashed Stack's decision.
AR-15s and guns like it are semi-automatic, meaning each bullet fired requires a trigger pull; automatic rifles fire bullets as long as the trigger is pulled. AR-15s may look like the M4s and M16s used in the military, but the latter are automatic, legally classifying them as "assault rifles" - and those are not permitted for civilian use. Stack is an advocate for reinstating the Federal Assault Weapons Ban, which was in effect from 1994 to 2004. That bill gave legal weight to the term "assault weapon," which included semi-automatic rifles like the AR-15, which is what Stack removed from his stores.
Adjusting to the blowback
Stack told us that as key players in the gun industry turned against his company, he had to rethink his business. The stock was largely unaffected by the decision, but he needed to adjust the company's growth plan if a sector of its business would dwindle. "So we said, 'OK, if this is the way it's going to go, how do we re-engineer our business?'" he said.
To date, Dick's has sold eight of its hunting-oriented Dick's Field and Stream stores off to Sportsman's Warehouse.
The sporting goods company also put its hunting business under a "strategic review." In the fourth quarter of last year, Dick's removed its hunting inventory in 10 stores, "just to see what would happen." It compensated by upping the volume of market-specific bestsellers, like "outerwear, licensed merchandise, and baseball gear," for the Boston store, as Stack noted in his book.
The result: "They've significantly outperformed the rest of the company." Hunting has been among the least profitable sectors for Dick's, Stack said, and the customized approach to different markets was a success. Dick's followed suit with 125 more stores this past spring.
"We actually think this is going to be a bit of a blessing in disguise," Stack said.