It's How We Play the Game by Ed Stack

It's How We Play the Game by Ed Stack

Author:Ed Stack
Language: eng
Format: epub
Publisher: Scribner
Published: 2019-10-07T16:00:00+00:00

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Our move to Pittsburgh and the infusion of new capital marked the start of a period of crazy growth at Dick’s. And when I say crazy, I mean it: it was crazy to go as fast as we did. In 1994, we had twelve stores. By the end of the year, we had eighteen. Within another few months, we had twenty-two. And over the following year, we opened up eighteen more on that base of twenty-two. We went from being a little family chain to being a serious regional power. As this expansion played out, it seemed at first that all was well. Our sales were terrific. Our margins were solid. Our board was ecstatic. Our new partners had pushed us hard to grow at this clip. We’d delivered.

It wasn’t quality growth, however. The view back then among big-box retailers was that you’d move into an area to establish a beachhead—just get stores up and running—and figure out the details later. I thought we could handle it. Opening stores was routine for us now, and I failed to detect any reason to slow down. I was the controlling shareholder, and I went along with the other directors. We thought we had the Midas touch.

But the fact is, we couldn’t handle it. We outran our capital structure. Our systems, such as they were, couldn’t keep up; we were merchandisers and marketers, not logistics-savvy. This breakneck expansion required having really sophisticated systems in place to move merchandise out of the warehouse and out to the stores, the right stores, at the right time. We had nothing like that; we were still using systems we’d put in place years before.

Our management team was completely overwhelmed. We had too few people trying to do too many jobs, and many details slipped through the cracks. We pulled workdays that were ridiculously long and still couldn’t keep up with what was required of us.

Not only did we open too many stores too quickly, we opened bigger stores—we introduced a new Dick’s prototype that measured a whopping sixty thousand square feet. The architecture we put into these cathedrals cost more to build—fancy floors, which were just plain stupid, because nobody noticed. Expensive fixtures. Design details that added up fast. The changes probably boosted our overhead with no return on our investment and did nothing to drive additional sales.

We located them in markets where we really didn’t know what we were doing; in one year we opened three stores in Cincinnati, three in Philadelphia, and three in Baltimore, all cities in which we had little on-the-ground history or insight. We didn’t take time to understand the hunting and fishing business there. What did we know about the catfish culture in Cincinnati, or fishing for rockfish and blue crab in the Chesapeake Bay? Not much. That showed in low sales volumes. At the same time, we made other mistakes. These stores were overinventoried and cost more to run, market, and supply.

Even so, we might have been okay. We could have trimmed our expenses on future openings and wrestled our spending back under control.


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