Dicks Sporting Goods continues to expand its “private brands” strategy, announcing Monday at the annual Bank of America Securities Investor Conference that they have inked a deal with Reebok to design, source, market, and sell Reebok athletic apparel under the RBK brand. DKS will use the brand as its in-house fitness apparel vehicle, replacing the Fitness Gear label for men and the Ativa label for women that were the retailers own private label brands. In a question and answer session with investors and analysts, DKS chairman and CEO Ed Stack said the RBK apparel is expected to reap margin rates 600 to 800 basis points higher than the branded business. The RBK product is expected to be in stores for spring 2008.
In his prepared remarks Mr. Stack also provided more details regarding the DKS licensing deal with Nike for the ACG brand. “It is a brand that Nike never really did an awful lot with in the United States,” said Stack. “It is more of a rugged outdoor brand, and Nike has never, ever let any retailer make this switch before.” Stack said the ACG product had just gotten into the stores for fall and suggested they were “really very pleased” with the early sell-through.
Mr. Stack also outlined a bit more about their deals with adidas for baseball equipment as well as their deals with Slazenger, Umbro and Field & Stream. He indicated that they have achieved their goal of producing 15% of sales through private label, but hinted the number could certainly go higher as the new “private brands” strategy takes hold.
On the subject of regional plans, DKS is focusing on Florida and Texas right now and sees 40 to 50 stores in Florida. They are also looking at Arizona and California. Stack indicated that he thought Chicks Sporting Goods was the best operated chain in California.
>>> The biggest question SEW gets from Wall Street on DKS is who might they buy to accelerate their westward expansion
