Originally Posted by DwightC
Sheesh! This is getting all political. Or something. There's nothing wrong with hating (or loving) big box stores or chain stores. Doesn't make you a leftie or a conservative. And I'm not sure what kind of chops you get from being a small businessman or knowing somebody who didn't get the risks associated with becoming a captive supplier. Even as I type this, the Moscow Open is finishing up (well, given the time difference, it's pr'ly over). Not sure Mother Russia is fertile soil for the auld game--though from what I hear the Chinese are deep into the love/hate relationship with golf that we're all familiar with.
I don't think Dick's problems are completely corporate or internal. I think golf is a cyclical business and the game itself ebbs and flows in popularity. We're currently still working off the excesses of the last boom, though we're getting towards the end of the process. We'll know that's over when a couple of management teams at the equipment manufacturers take a long walk off a short plank and go splash in the shark tank. Hasn't happened yet. Dick's is run by a bunch of C-List guys, and they made a dumb bet, doubled down, blew the execution, etc. etc. I tried this out on my wife and a friend of hers at a dinner party over the weekend--telling them Dick's is clearing the space for, get this, yoga gear (which I read somewhere)--and they both (both being yoga practitioners) announced they would never buy yoga togs at a sporting goods store like Dick's.
Dick's has got a problem. I hope some of those 560 pros have new jobs by now.
Right, we got a bit off topic. Thanks for reeling us back in.
The question is not whether the golfing business is down enough to justify eradicating these positions. Their decision was purely to reduce the cost of selling goods even if it is not beneficial to their customers. If you don't believe me, just wait until you try to ask questions regarding the equipment from someone making barely above minimum wage and probably doesn't know a lot about golf and possibly never played it.
Let's just say that the average position being eliminated makes $18 to $20 per hour, the job is now being done by someone making $9 per hour. The amount of savings is about $5600 per hour or about 11.65M per year.
The top executives made 9M, 3M, 4M, 4M, 5M per year in 2013 (rounded up). The senior executives made 25M in only their salaries last year. They make far more in options and other perks, and remember that the people who work for them make a commensurate salary. The net income of the second and lower tier management? Possibly in the 50M range.
Edward Stack took home 142M in stock options making him number 6 of all CEOs in 2012.
So, they think that Golf is not going to do well?
Golf and Hunting are a substantial part of their business, because the stock dropped 15%. Investors were concerned that the reason for this was a reduction in the Golfing business.
Well, just wait until their "Golf Technicians" scare off the remaining customers.
The way I look at it is they took out the engine that powers their golfing sales, and replaced it with a squirrel cage hoping to keep their existing sales.