Dick's Finishes Galyan's Fusion

Comp store sales rose 3.2% in the opening quarter of the year. By second quarter 2006, the former Galyan's stores will be included in the company's comp store base. "That's one quarter ahead of schedule," said Edward W. Stack, chairman and CEO, during a conference call.

The company increased its guidance for 2005 and anticipates an increase of between 1% and 2% in comp store sales for the year. It also expects to open 25 new Dick's stores in 2005.

While the name, Galyan's, gave way to Dick's during 2004, conversion of Galyan's units' merchandise mix was the final step in integrating the 40-some Galyan's stores with Dick's nearly 200 units. Acknowledging that such integration can be unsettling to former Galyan's shoppers, Stack said, "there were no surprises." On the plus side, athletic footwear, and especially the cleat business, along with all golf business fared well during the transition. Casual apparel at the former Galyan's units "struggled a bit as we try to anniversary that business," Stack said.

In the hunting category, "because we exited the handgun business," a category Dick's dropped many years ago, "business in ancillary, associated products also went away in those stores," he said. "We probably had the biggest complaints in Texas where a big percentage of people are licensed to carry handguns."

Heading into winter, "we'll go forward with downhill skis in 35 stores, mostly Galyan's," Stack said, "and we'll test them in a few Dick's units in the Northeast. The vast majority of our focus, however, will be in snow boards."

Dick's private label business is also poised to increase. It accounted for 10.1% of total sales in this year's first quarter. At the recently converted Galyan's stores, it represented a 7% share of sales, "and we didn't have all products in those units for the full quarter," Stack said. "We feel we can bring private label business to 15% over the next couple of years."

In all, there are now 236 Dick's stores, aggregating 13.6 million sf in 34 states. Although William J. Columbo, president and COO, did not disclose costs of advertising campaigns for the grand re-opening of Galyan's units under the Dick's identity, he said there were two distinct campaigns. In Chicago, Minnesota, Denver and Atlanta, where there had been no Dick's units, the campaign was similar to ones Dick's uses when it enters a new market. "In markets where we had a presence, we did much less advertising and a different approach, more like we use when we're adding a store in a market," he said.