Like many other retail and restaurant chains, Dick's Sporting Goods (NYSE:DKS) has decided to close all of its locations for two weeks, to help slow the spread of the COVID-19 pandemic. This includes its Dick's Sporting Goods, Field & Stream, and Golf Galaxy chains. The closure already went into effect on March 18. The company hopes to reopen on April 2.
Investors likely already anticipated this announcement. Shares of Dick's Sporting Goods are down nearly 70% year to date.
A troubling trend
There may be broader implications for consumer discretionary retail chains. Dick's, like a few other retailers, had remained open until now. However, in an SEC filing, management noted its store traffic and product demand has fallen so hard that it no longer makes sense to remain open. Assuming this is a broad trend, other retailers still valiantly trying to stay open may be forced to follow Dick's lead.
However, Dick's business isn't shutting down completely. Its e-commerce operations will remain open, and the company will allow customers to pickup at stores via its Curbside Contactless Pickup service. Fortunately for the company, e-commerce has long been an area of intentional focus. During the fourth quarter of 2019, Dick's online business reached 25% of sales. Still, it's fair to wonder how much demand there will be for sporting goods during a national emergency.
The company has promised employees will still receive both pay and benefits during this time.