DKS
#It would only be our sense, because the data that we got from them was not at that level of detail by category of business.
But we do think that they had a relatively good footwear business.
And we think footwear is an opportunity for us to gain some market share, as is their apparel business and their team sports business.
They had exited some of the other businesses or really scaled them back, such as the hunt, fish, camp business.
And some of the ---+ some other hard lines, ancillary hard-line businesses.
But I would say footwear and apparel is the key area that we're looking at that will be the biggest market share opportunity for us.
I think there's a number of things.
I think the industry has definitely been over stored.
We are making some big strides with this right now with over 20 million square feet coming out of the marketplace.
I think that some of these other companies didn't have the relationships with the vendors that we do; when you walk into the stores you can see that with the investment that we have made in conjunction with Nike and Under Armour and TNF, so that was a big part of this.
And then I think one of the smartest things that we did versus some others is that we have no debt.
And a number of these retailers had a significant amount of debt, and when business gets soft it gets difficult.
So we know the debt that TSA had; we know that whatever Vertis had they had, but we're debt-free.
We can ride through these difficult times much easier than some of these other retailers did.
We really look at that as an opportunity; that's why were making the investments that we're making in Project Eagle.
You can see that our e-commerce business continues to grow at a pretty rapid rate.
We're going to continue to make these investments, and we look at that as an opportunity.
And you'll start to see more from us on the e-commerce side as we try to build out not only the DICK'S e-commerce business, but also what we're going to be doing with Golf Galaxy and with Field & Stream.
A number of retailers and analysts look at this as a problem for retailers like us; we look at it as a real opportunity.
And you'll see as we continue to make these investments, our business will continue to grow in this area.
Sure, we're not going to go chase the liquidation pricing.
So they are going to take pricing at 20% to 30% off, and then they're going to go 40% to 50%, off and we are not going to go chase that.
As those liquidations get to be pretty aggressive, we're not going to go chase that.
We will bide our time, we'll be patient, and we don't think it's the right thing to do for our brand.
And we will be patient and let them get through this liquidation over the next quarter-and-a-half.
And then beginning in 2017, I think we have got an opportunity to take significant market share when these guys ---+ when this 20 million square feet of sporting goods retail is gone.
There is not.
The one thing that we have always talked about here is you can't fix bad real estate.
We are very disciplined, and we think a lot of this market share is going to come to us.
Our business with Under Armour we expect to go up; our business with Nike we expect to go up.
The same with North Face, Adidas, Taylor Made.
We expect to increase our business with these guys.
And we will not take bad real estate.
We will not take real estate at economics that don't fit our model, because you live with that for 10 years; you can't fix bad real estate.
You can make a bad buy from a merchandising standpoint, and you can mark it down and you can do whatever you need to do with it to get it out of the system.
Bad real estate, you've got it for 10 years.
I don't know what that is.
All I know is that we really made a strategic initiative years ago to partner with these brands.
You walk into our store and you see the significant Nike presence, the significant Under Armour presence, what we're doing with North face.
And I think that really resonated with the consumer and helped move market share to us.
And it is clear that we're the winners in this race between us and Sports Authority and Sport Chalet, and we're very happy the position we are in right now.
I think there will be more consolidation.
Do we see weaknesses in some of these other competitors.
Sure.
I don't think it would be appropriate for me to call it out here.
But, yes, I think there is and I think there will be more consolidation going forward.
Well, we think about that all the time, and that is why we are so disciplined from a real estate standpoint.
We really do believe that a balance between stores and e-commerce is the right balance.
Where that balance is, we're like everybody else in this industry, trying to figure out where that is.
But that's why we're going slowly, that's why we're very disciplined from a real estate standpoint, and that's why the reports that you saw, we didn't buy a lot ---+ we didn't make an offer on a lot of TSA stores.
And that's why you hear me talking throughout this call, when we've talked about TSA, that the stores we're interested in are really inconsequential to our plan.
There's some good real estate that we would like to ---+ that we would be happy to take if the economics are right.
We don't feel any pressure or any hurry to get those deals done.
We don't feel any pressure or any hurry to take this real estate from Sports Authority, because what's going on in the marketplace, there will be other real estate available.
So we're exercising our patience, we're being very diligent in our real estate process, and as we go on we will understand where that balance is.
And we feel right now we are in a pretty good spot.
And remember, our leases are, for the most part, only 10 years in duration.
And I forget, I don't have it right off the top of my head, but we've got a number of stores that are coming up for renewal next year, the year after that, the year after that.
So over a period of three to five years, we have the ability to not renew or renew at lower rates stores that we have right now.
So we've got a lot of flexibility in our Business, and this is one of the things that I don't think the street understands is how much flexibility we've got in our real estate and our real estate strategy.
Thank you.
I would like to thank everyone for joining us on our quarterly call, and we will look forward to talking to everybody at the end of the next quarter.
Thank you.
