The Strange Case of Dick’s

In the aftermath of the epic failure of law enforcement at Stoneman Douglas High School, a number of companies adopted preening, anti-gun stances. One of them was Dick’s Sporting Goods. What makes this weird is that Dick’s is a major retailer of firearms. If you haven’t followed the story, the NRA’s Institute for Legislative Action sums up:

We have recently been reporting on the bizarre anti-gun activism of one of the nation’s larger firearm retailers, Dick’s Sporting Goods and its affiliated Field & Stream stores. First, the company announced it would stop selling most centerfire semi-automatic rifles at its stores, carry only limited capacity magazines for semi-automatic guns, and ban firearm sales to certain legally eligible adults. It then took the further step of declaring it would destroy its inventory of the newly-restricted firearms at company expense. And if that weren’t enough, the news also recently broke that the company had hired expensive D.C. lobbyists to push for gun control measures on Capitol Hill.

Has this ever happened before? A company lobbying against the products that it sells? As you can imagine, gun owners have not been amused by Dick’s antics:

Last week, the Board of Governors of the National Shooting Sports Foundation (NSSF) – the trade association for the firearms, ammunition, hunting and shooting sports industries – voted unanimously to expel Dick’s Sporting Goods from membership in the organization. …

Meanwhile, members of the firearms industry have also begun withdrawing their products from Dick’s and Field & Stream outlets.

First, Illinois-based Springfield Armory – maker of several lines of highly-popular rifles and pistols — announced early this month that was “severing ties” with the two retailers. In announcing the decision, Springfield Armory stated, “we believe in the rights and principles fought for and secured by American patriots and our founding forefathers, without question.” It concluded, “We will not accept Dick’s Sporting Goods’ continued attempts to deny Second Amendment freedoms to our fellow Americans.”

Iconic shotgun maker O.F. Mossberg & Sons followed up this week with its own announcement that it will “not accept any future orders from Dick’s Sporting Goods or Field & Stream” and is “in the process of evaluating current contractual agreements.” …

MKS Supply, marketer of Hi-Point Firearms and Inland Manufacturing, LLC, has now become the latest supplier to cut off Dick’s and Field & Stream.

And lots of firearms owners are staying away from Dick’s, not only for gun purchases but for other sporting goods. Dick’s CEO, Edward Stack, admits that the company’s anti-gun posturing “is not going to be positive from a traffic standpoint and a sales standpoint.”

Glenn Reynolds has diagnosed what is going on here:

[I]n ESPN we see an institution that is recklessly alienating its prime customer base, and only now — much too late — beginning to dimly sense that it’s in trouble. And this is a pattern we’ve seen over and over again. Why is that? I think it’s a function of two things. First, the people running most of the insititutions come from a monoculture. …

Second, their loyalties are essentially tribal. They care more about what their peers think of them than, basically, anything else, including the success or failure of the institutions they manage. Thus, they are prone to suicidal levels of virtue-signaling.

I think that is exactly right. Dick’s CEO cares more about his standing with the club than about his company’s profitability. If I were a Dick’s shareholder, this would make me very unhappy. So far, Dick’s anti-gun activism doesn’t seem to have hurt the company’s value; not much, anyway. But Stack’s admission that his virtue signaling likely will lose shareholders’ money is remarkable. If he had said that he expects consumer good will from his anti-gun moves to negate any adverse reaction from gun owners and civil rights advocates, he would have been immune from suit under the business judgment rule. But if Dick’s share price drops, or fails to keep pace with its industry, Stack’s admission is virtually an invitation to a class action lawsuit on behalf of shareholders.