by Ed Stack
We remained a fairly unsophisticated operation, however. None of our merchandise went directly from the manufacturer to our stores, which is a process called drop-shipping; it all came into our warehouse, where we did “splits,” parceling out the contents of each crate to our various locations. We did many of the splits by hand. It was time-consuming, tedious work.
Still, now we had two stores in Rochester, two in Syracuse, one in Buffalo, and the original two in the Binghamton area. We were feeling pretty good about ourselves.
* * *
As I mentioned a while back, in my first years out of college I’d read a lot of business books. All had lessons to offer, but none resonated quite like the story of Sam Walton—how the owner of a Ben Franklin five-and-dime franchise in rural Arkansas grew that one small store into the retail juggernaut that is Walmart today. One of the principles that guided Walton was to grow his business quietly, unobtrusively, to stay below the radar so that his competition didn’t notice him. He did it by expanding his geographic reach in concentric circles, radiating out from his launching point in tiny Bentonville.
We replicated Sam Walton’s strategy. From Binghamton, our expansion had come in small, outward steps—to Syracuse, then Rochester, then Buffalo. From there we moved in the early nineties to Albany, New York, about 130 miles northeast of Binghamton; put a second store in Buffalo; then opened another ninety miles to the southwest in Erie, Pennsylvania. After that we slid eastward to Springfield, Massachusetts, eighty miles from Albany, and Hartford, Connecticut, twenty-five miles south of Springfield.
These were small or medium-sized markets, which gave us a shot at customers without having to worry too much about a bigger, better-capitalized competitor moving in on us. The modest geographic area we controlled made distribution pretty simple—the stores were located on a handful of principal highways, so that one truck could service several on a single trip. Most important, they were all in cold-weather markets, and in hunting country, so we understood their customers’ needs. Winter outerwear for hunters and skiers remained an important piece of our sales mix.
For a while, our low-key, small-market strategy worked. We had only local competition, and we were accustomed to dealing with that. Let me tell you a story about the kind of competition I mean. Back in the day, you could only hunt deer in the Southern Tier with a shotgun, the preferred ammunition being solid lead or copper slugs. Two weeks before hunting season began, one of our competitors, Philadelphia Sales, would offer their shotgun slugs cheap, as a loss leader, and I remember my dad taking cash out of the register and sending us kids over there to buy up their inventory. They caught on after a while and set a five-box limit, but my dad had a lot of kids.
By the time I was running the store, we competed with both Philadelphia Sales and the local Kmart for our hunting business, and we’d undercut their prices on ammo in our ads. When they dropped their prices to match ours, we’d ratchet ours down again. I was standing behind the gun counter one day when in walked a guy from Kmart. He was dressed like a New York lawyer in a suit and tie, and though I was twenty-three or twenty-four, I was baby faced and often mistaken for a teenager. The Kmart fellow, apparently figuring he could intimidate us, stopped on the other side of the counter and said, “You people need to stop this price war.”
“What do you mean?” I asked.
“You have to tell the boss you need to stop this price war,” he said, “or we’ll put you out of business.”
“Okay,” I told him. “I’ll make sure he knows.” As he walked away, I thought: What an asshole. In our next ad, we knocked another ten cents off the price. They matched us. I sent my brother Marty over to Kmart, and he cleaned them out. He filled an entire shopping cart with shotgun slugs, case upon case of them. We added them to our inventory, and once the season started, we had a pile of slugs that we’d bought for less than we would have paid Remington or Winchester. They drove a lot of traffic into the store.
All of which is to say that in the early going, competition had been something we looked forward to, that we had fun with. It was a game we were good at, and we enjoyed playing it. Because we were willing to be aggressive, we usually beat the other guy.
Now, however, came bigger and far more dangerous adversaries. Our first real threat came from Herman’s World of Sporting Goods, the industry’s apex predator on the East Coast during the 1970s and 1980s. Based in Carteret, New Jersey, the company dated to 1916, and for a long time was centered just in the New York metropolitan area. But in the early 1980s it began an aggressive expansion, and one of the markets in its sights was Binghamton.
We were alike in many ways. They catered to a wide variety of sports-minded customers, with a good selection of team sports and camping equipment, fishing tackle, golf gear, footwear, and apparel. Their arrival had us worried. They dwarfed us, and they had a reputation as good operators. Defending ourselves meant understanding how they did business, so we took a field trip to New York and looked over their stores. We also researched their past advertising, which was instructive, because retailers are creatures of habit. They follow a schedule that doesn’t change much from year to year—back-to-school happens at the end of every summer, and hunting season starts the same time in the fall, and Christmas always comes on December 25. Sports retailers advertise pretty much the same sales at the same time every year, always pushing the same sort of products, because that’s the merchandise that drives their business.
Our research into Herman’s advertising revealed that, sure enough, they took out newspaper insert advertising that was as predictable as the earth rotating on its axis. Their modus operandi was to run their inserts in the Sunday papers. We, on the other hand, usually ran our inserts on Wednesdays—that was the traditional day that supermarkets ran their ads and papers published their food sections, and it drove a lot of readership. It also gave us the ability to give our customers a heads-up about what we’d have on sale during the coming weekend.
They opened at the Oakdale Mall in Johnson City, apparently unconcerned about the small-town stores already in the market. We had a pretty good idea what they’d be advertising each week and prepared our own inserts to push the same items, only at lower prices. When their insert came out each Sunday, we had about twenty-four hours to fine-tune our own Wednesday insert. And week after week, we just beat their brains in. They were so big that for a long while they didn’t even know they were getting pummeled.
When we opened in Albany, they were already there, and we did the same thing. I’ll tell you a story that’s embarrassing about our face-off with them there. Albany marked the first place outside of Binghamton in which we tangled with Herman’s, so Tim Myers and I went up there the Monday after Thanksgiving to see how they’d arranged their store for the holidays, so we’d know what to do to compete with them the following year. We walked in and found that it looked okay but fell far short of great. Tim and I grabbed dinner, during which I idly mentioned that I’d really like to know how their business had been over the Thanksgiving weekend. “Buy me another beer,” Tim said, laughing, “and I’ll find out.”
I bought him another beer, and we went back to the Hampton Inn, where we were staying. Tim called the Herman’s store, which we could see across the parking lot. The manager came on the line, and Tim said, “This is Bob Corliss. How you doing?” Bob Corliss was the CEO of Herman’s.
“Good, Mr. Corliss,” the manager replied. “How are you?”
“I’m calling around,” Tim said, “to see how business was over the Thanksgiving Day weekend.”
I wasn’t entirely comfortable with the stunt, but it was too late to stop it now. The manager told him what categories had sold well, what hadn’t. He spoke in generalities, but that was all we wanted to know. Then Tim surprised me by saying: “Well, the reason your business might not have been so good is that I was in your store, and it’s really a mess. I’m going to be back there tomorrow morning at nine thirty, and it better look different.”
We were expecting Jay Mininger, who was driving in from Syracuse, so we went out to meet him. We had a drink, talked for a while, then drove back to the hotel at about eleven. Every light was on over at Herman’s. The parking lot was full. I’m sure there was nothing but asses and elbows in that store through the night.
I am not advocating that kind of behavior. To this day, I feel bad that we did it. My only defense is that we were young. The stunt made no difference in our struggle with Herman’s, and it made life miserable for some folks who didn’t deserve a sleepless and anxious night. Moreover, we’ve been on the receiving end of corporate subterfuge, and I can attest that it doesn’t feel good.
In the interest of staying on subject, I’ll tell you about that episode now, though it happened more than twenty years later, in 2014. One day that February, Mitch Modell of Modell’s Sporting Goods, a prominent retailer in New York, walked into our store in Princeton, New Jersey, with a female companion, and told our manager that he was a Dick’s senior vice president gathering information for an upcoming meeting with me. He asked the manager to walk him through the store and tell him what was selling, what wasn’t. He asked to see the back room.
Our manager did as he was asked. He took him into the back room and gave him a look at the stock. Business was so-so, he reported. Footwear was doing okay, but some categories had been disappointing. He didn’t offer up sales figures, but still, he passed on proprietary information we didn’t want a competitor to have. And the back room is sacred ground. You never let a competitor into your back room.
Once Mitch left, the manager began to feel the whole visit had been sketchy and called his district manager. It was then he learned that no senior vice president had been down his way. A look at our security camera footage identified the imposter. I knew Mitch pretty well, and liked him, but let me tell you, I was pissed. Modell’s had a store just down the street, and I saw this as underhanded, a far greater violation than we’d pulled on Herman’s. I called our general counsel and told him—though, as I mentioned before, I’m not a litigious guy—that I wanted to sue Mitch. He didn’t think we could. I insisted that we should. “Okay,” he said. “If you really want me to do it, I’ll get started.”
We filed suit in New Jersey superior court, and in no time the press was on it. Mitch had done an episode of the TV show Undercover Boss, which made the story irresistible to the media, and he got crucified—here was a corporate CEO taking the whole “undercover” thing a little too far. For weeks the story built, until one morning, as I was getting ready for work, I caught a segment about the affair on ABC’s Good Morning America, in which he was absolutely flayed. And I realized it had gone on long enough: he’d done more than enough penance for his sin.
At the office I called our general counsel and told him we needed to settle. He told me that Mitch’s people had just called, looking to settle, too. “I’m sure they’d write us a check for half a million dollars,” he said. “We might be able to get a million.” I suggested he call Mitch’s lawyers and tell them we’d settle for one dollar, on the condition that Mitch never do it again. So that’s what we did: we settled for one buck. I didn’t want to take half a million dollars from Mitch. I just wanted to encourage him not to play dirty again.
The situation reminded me of another story. Back when I was playing Little League baseball, one of my teammates was a kid from a big family that barely scraped by. We were at Tastee Freez after a game, and my dad went to pay for the team’s order when the kid’s dad said, “No, Dick. I’ve got it this time.” My dad stepped aside and let him pay. Kim, who was about ten, was there with us, and she whispered: “Dad, why did you let him pay? You know they don’t have much money.” To which my dad said, “Kim, you have to understand—you never want to take away a man’s dignity.”
At times when I’d be ready to write off my dad for his flaws as a parent and businessman, moments like that intruded, forcing me to admit that he’d displayed moments of grace and compassion. The example he set that particular day has stayed with me, when as an adult I’ve found myself facing competitors whom I intended to drive out of business, or haggling with a vendor over the price of a big order. It’s fine to play tough, but you have to be fair. You have to let the other guy walk away with his dignity intact.
Back to Herman’s. We were small, and nimble, and far more maneuverable than they were. In the end, they weren’t in any shape for a fight: they were bought by a British supermarket chain that didn’t understand retail in the States, and by the early 1990s they were in retreat. Among the first markets they pulled out of were the ones they shared with us.
* * *
All through the company’s early growth, I spent a lot of time on the road or in the office. I’m not sure whether I’d be classified as a workaholic, but like my dad, I had something to prove. I wouldn’t play at Yankee Stadium, but I wanted to run our sporting goods business like I was competing for the Cy Young Award. Besides, I had a wife and a baby son, Michael, and a mortgage, and employees who depended on me. Failure was not an option.
But no matter how busy I was, I viewed four hours each week as sacred: my Monday round of golf with my grandfather.
When Gramp was eighty-seven, we played the American Heart Association tournament, as usual, at Endwell Greens outside Binghamton. It was a cold and drizzly day, which was on my mind because at that point in his life, my grandfather was susceptible to colds, and I knew that my very protective grandmother wouldn’t approve of his being out in such inclement weather. We weren’t playing well, had no chance of winning, and the weather was turning worse, so as we teed off on the sixteenth hole, which was right beside the clubhouse, I said, “Hey, Gramp. We have no chance to win this. It’s nasty out here, and if you get sick, Grandma is going to be upset with me. Let’s just pack it in.”
He teed up his ball. “Eddie,” he said, looking my way, “if you tee up on number one, you putt out on eighteen.”
My buddy Dave Ziebarth, who was playing with us, chuckled. “Guess we’re going to keep playing!”
A couple of days later, Gramp had come down with pneumonia. I went over to see him, and as I’d predicted, I was in hot water with my grandmother. “Why did you have to finish playing?” she hissed at me. “Now he’s sick!”
He recovered and was back on the course a few weeks later. That year, he shot his age once again, and he did it again the next year, and the year after that. At eighty-nine, he played in the B.C. Open with my brother Marty and me. We were in a pro-am fivesome with PGA Tour pro Paul Azinger and watched Gramp smack tee shots down the middle of one fairway after another. Azinger, amazed, turned to us halfway through the round: “That’s the smoothest swing I’ve ever seen.”
But by that time, Gramp had developed a circulation problem in his legs that forced him to use a cart. Not long after, his doctors discovered cancer in one of his shoulders. That limited his play, and at ninety-two he missed playing the American Heart Association tournament for the first time. He came out and watched a few holes from the gallery.
Gramp was normally so upbeat all the time, so happy with his life, that it was hard to read just how quickly the cancer was progressing. We found out soon enough. His condition worsened until he was put into in-home hospice care and spent most of his days in a hospital bed in his living room. I went to see him often. One day I found him out of bed and sitting on the sofa, but it was clear the end was near. “You know, Gramp, you were always there for me,” I told him. “At baseball games and football games and always. You were always the one I could count on. You were the best grandfather in the world.”
He nodded, and smiled as if to say, “I hoped you felt that way.” We sat quiet for a moment, then he looked at me. “Eddie, I’m ninety-three and I know I’m a goner,” he said. He smiled again. “But I feel I could go out and play third base right now.”
I’m so grateful that I had that conversation with him—not only because I had a chance to tell him how much he meant to me, which was a won
derful gift, but because his comment stands as one of the most inspiring demonstrations of positive attitude I’ve ever heard. I hope I can age as gracefully.
It was a couple days later, while he was lying in bed, that he called my grandmother over. “Annie, it’s time for me to go now,” he told her. “I’m going to go to sleep now.” They talked for a few minutes, cried together, kissed, and held each other’s hands. Then he went to sleep. My grandmother sat with him. An hour passed. His breathing grew shallow.
Suddenly his eyes opened. He looked at her and asked: “I’m still here? What the hell happened?”
He died the next day.
* * *
My grandfather’s influence didn’t end with his death. Years later, he prompted me to reverse a pretty big business decision. The Binghamton area had long hosted the B.C. Open (“B.C.” standing for “Broome County” and for the B.C. comic strip—Johnny Hart, who drew it, was from Binghamton). It drew some of the biggest names on the tour and was a real point of pride in town. The first time I saw Arnold Palmer and Lee Trevino was at the tournament.
But the PGA Tour changed the schedule, and the B.C. Open lost its slot in 2007. The tour made it clear that if organizers could attract a title sponsor, they’d book a senior PGA event in town. A guy named Alex Alexander led the effort to find a sponsor, and he called me several times to ask that Dick’s fill that role. I was sympathetic but couldn’t see any economic sense in our being involved. I politely said no.
Alex, who’d been a friend of my grandfather’s, did not give up. He called. He wrote. He was always a gentleman about it, but he was persistent. Time was getting short—Alex had less than a week to find a sponsor—when he wrote one last time. I was sitting at my desk as I read his note, which repeated some of the arguments he’d made earlier—that Binghamton needed a tournament, that it’d be great, and so on and so on. He ended the note with: “I can just hear what Dutch would say if you did this. He’d say, ‘Hey, Alex. How ’bout that?’ ”
