The announcement was made today. Here’s the release, followed by a memo sent out to the industry by Chick’s beach, snow and active apparel buyer. Chick’s 15 stores have become an important account for many action sports brands.
PRESS RELEASE:
Dick’s Sporting Goods Agrees to Acquire Chick’s Sporting Goods
November 26, 2007: 04:05 PM EST
PITTSBURGH, Nov. 26 /PRNewswire-FirstCall/ — Dick’s Sporting Goods, Inc. and Chick’s Sporting Goods, a privately held corporation, have entered into a definitive stock purchase agreement whereby Dick’s will acquire Chick’s Sporting Goods. Under the terms of the agreement, Dick’s has agreed to pay approximately $40 million in cash for the outstanding equity of Chick’s. Including the assumption of approximately $31 million of indebtedness, the transaction values Chick’s at approximately $71 million, and will be financed using Dick’s existing credit facility. Chick’s shareholders have the opportunity to earn up to $5 million in additional consideration, upon satisfaction by Chick’s of certain specified performance criteria through June, 2008.
Completion of the transaction is contingent upon various customary conditions. The transaction is anticipated to be completed on or before December 31, 2007.
Chick’s currently operates 15 specialty sporting goods stores in Southern California averaging ~50,000 square feet, and generated over $120 million in sales during the year ended June 30, 2007. Two additional store leases have been signed and those stores will open as Dick’s stores in 2008 and 2009.
“Chick’s Sporting Goods is well positioned in several important Southern California markets. This acquisition provides the Company with an immediate presence and market share in Southern California. The passion with which Chick’s Sporting Goods serves the core athlete and California lifestyle customers which include beach and skate markets via their assortment featuring products from authentic manufacturers, commitment to customer service and knowledgeable sales associates, along with Chick’s community involvement compliments Dick’s Sporting Goods strategy,” said Edward W. Stack, Chairman and CEO of Dick’s Sporting Goods.
“We are pleased to be part of the Dick’s Sporting Goods family. The resources and expertise that are available from Dick’s, combined with our knowledge and experience in the California marketplace will provide our customers with a great shopping experience,” added James M. Chick, CEO of Chick’s Sporting Goods.
Dick’s management anticipates the acquisition will be marginally accretive in fiscal 2008 from an earnings perspective, as Chick’s four wall operating profitability is partially offset by interest expense, acquisition and integration costs. Dick’s expects the acquisition will be neutral from an earnings perspective for the balance of fiscal 2007. We plan to provide earnings guidance for fiscal 2008 with Dick’s year end earnings release in March 2008, consistent with Dick’s standard practice
PAM HUNZICKER EMAIL:
You’ve all heard by now…the BIG, BIG news. Jim Chick sold his company to DICK’S SPORTING GOODS.
It was a HUGE surprise to all of us who knew something would happen within the next few years…but had no idea at all it would be so soon.
After the initial SHOCK…we’ve had time to research DICK’S, devour the facts…and come to some conclusions of our own.
For me, personally, and I’m sure for Chris and Kathleen…we almost feel that there has been a family tragedy. We have worked long and tireless hours developing such wonderful strong relationships and bonds with our vendors, but most of all, many of our sales reps. are close friends. We have spent years making CHICK’S ” DIFFERENT” from our competition, so we wouldn’t be just another “big box” sporting goods store. Being “different”, we’re sure, is part of what made our company attractive to DICK’S to begin with.
None of us know what to expect. My dream, is that they will keep some CHICK’S…as CHICK’S. It could even be a big plus, (as when NIKE bought HURLEY)…and gave them the ability to become even better. Right at this time, we simply don’t know.
Stay tuned…and remember …we have built our business on relationships…give and take and friendship. We understand the the people who run DICK’S are very intelligent, and very nice people. I don’t think anyone should panic. Somehow, I think things will work out just fine.
Until, further notice….BUSINESS AS USUAL!!
Pam Hunzicker
Chick’s Sporting Goods
