Hibbett Sports sells key Nike and Adidas product to “underserved markets” – Footwear News

Hibbett Sports has a unique brick and mortar advantage when it comes to winning over specific consumers.

The sports store focuses on “underserved markets” where there is less competition. This strategy allows it to appeal to consumers who have fewer purchasing options. It also generates value for its main suppliers.

In a call with investors recapping the company’s third quarter results, Hibbett President and CEO Michael Longo said the company expects by January 2022, more than half of Hibbett’s stores no longer compete with stores within three miles of similar key products.

To illustrate this point, Longo recalled his experience shopping at a Hibbett store in what he described as an “underserved market” in Texas. When he asked the manager to name the store’s main competitors in the area, they couldn’t find an answer, with so few competitors nearby.

“Our closest competitor who sells products that look like us anywhere near us is 45 minutes away,” Longo said of this store and many others. “So we are basically the only distribution point for Nike, Jordan, Puma, Adidas, Under Armor etc, in this county, within a 45 minute radius of the store. So we operate this whole commercial area and the areas around it, and that’s part of our competitive differentiation. It is that consumer in the underserved market.

Thanks to this strategy, Hibbett is able to maintain strong partnerships with suppliers who could benefit from these sales.

“We really like this business model,” Longo said. “We thrive in this environment and therefore we are incremental and complementary to the businesses of the big brands. And we think that’s a big part of what we do.

On the other hand, retailers who fail to deliver these positive results to their partner brands are likely to fall behind. In a note to investors regarding Foot Locker’s recent performance, Williams Trading analyst Sam Poser said he “remains on the bench” about the shoe retailer, highlighting its declining position with top brands. .

As Poser said, Dick’s Sporting Goods, Hibbett and JD Sports and “seem to be more popular than Foot Locker by the major suppliers.”

It is essential to have a close relationship with key brands like Nike and Adidas at this time, especially as brands are ending some retail partnerships to focus on DTC channels. Additionally, brands are more likely to allocate products to better performing partners when inventory runs out due to supply chain slowdowns.

“In conjunction with all of the distribution changes that brands are making, this leaves us in a very, very strong position to recover sales and essentially, in the majority of our markets, be the single point of distribution for all of our core brands.” , Executive Vice President of Merchandising Jared Briskin said on a call with investors. “And that has dramatically increased our positioning with brands and the focus on our business, particularly around inventory and some of the supply chain impacts.”

Hibbett posted a 25.4% increase in third-quarter net sales to $ 1.31 billion, from $ 1.04 billion in 2020. Net income was $ 25.2 million, or $ 1.68 per diluted share.

James T. Quintero