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Hibbett Sports scores big

By
Kelly Dawson
January 11, 2018
Photo credit:

You don’t have to be a die-hard sports fanatic to understand America’s favorite games.

A first down in football, as most of us know, is a good thing — and clearly, touchdowns are even better. Hitting a homerun in baseball is worth some applause, as is a three-point shot in basketball. But even if a few of those terms are over your head, perhaps one term transcends even the most sports-averse spectator: The underdog.

In this case, the underdog isn’t a benchwarmer on the state championship team, or even a modern Rudy ready to play. It’s Hibbett Sports. Those in the Midwest and southern areas of the country are likely acquainted with this sporting goods chain, which makes a point of attracting a market that’s more aligned with its small-town sensibilities. Since it opened in 1945, Hibbett Sports has catered to locations that bigger box stores may overlook. Those areas may have cost Hibbett some national notoriety, but what it’s lost in fame it’s gained in intimacy. And even so, the company currently has more than 1,000 outposts across the country, which is far from a major blowout.

Like most underdogs, Hibbett Sports doesn’t want to be ruled out of the game. Its offerings from some of the most recognizable brands in the athletic gear business — from Nike and North Face to Puma and Adidas — have made it a recognizable source in the wellness sphere. And although it may be more accustomed to the minor leagues on main street, its recent opening of an online retail store shows that it’s ready to go pro. Now let’s quit it with the sports analogies and chat a little bit more about Hibbett’s history, and what it plans to do next.

Assembling the team

It isn’t a surprise when a six-foot-two teenager is recruited to play basketball, and it shouldn’t be a shocker that this company was started by someone interested in sports. Rufus Hibbett, a high school coach and teacher in Florence, Alabama, founded the business in 1945 — but he originally gave it the name of Dixie Supply Company. It wasn’t until his sons Ike and George came onboard in 1952 that the signs changed, first to Hibbett and Sons and then to Dyess and Hibbett in 1965. That year, the company expanded with a second store in Huntsville, and by 1969, the business landed on the title it has now.

As 1980 rolled around, Hibbett’s name started gaining real recognition. At the time, the company had 13 stores and an interest from the Andersons, the family’s hometown neighbors. The Andersons purchased the business with a plan to add even more shops to the chain: they brought in management, implemented operational strategies, and moved forward with expansion.

And how exactly did they agree to do that? Well, by sticking to what the company had always known: small towns. Hibbett grew in the 80s and 90s because it opened stores in smaller markets where other national names like Dick’s Sporting Goods couldn’t count on a big enough return for taking up more square footage. Because of that, larger chains were never competition, and Hibbett’s could expand by their own terms. By 1995, the company had 60 stores. And a year later, the Andersons sold Hibbett to the investment firm Saunders Karp & Company. In 1997, Hibbett went public and even had its first “superstore” to boot.

Hibbett was known in the areas where it opened new businesses, and alongside local facilities and management, a good reputation was fostered. People could depend on Hibbett for all of their sporting good needs, nearby mom and pop stores could still make profits, and no one appeared to be out of the game.

But of course, when the stakes to win get bigger, the competition gets fiercer. And in this case, the big rival came by way of the internet.

Put me in coach, I'm ready to play

Here’s something else that shouldn’t be a surprise: the internet changed the way people shop. And the shift changed the way that Hibbett approached its business, too. Although it continued to expand in recent years — and hit the 1,000 store mark in 2015 — the company realized that it couldn’t rely on its classic brick-and-mortar stores alone.

Earlier this year, Hibbett opened its first online shop, where customers can still get the same apparel it knows from its classic chain whether they’re in a small town or a big city. It’s a noticeable but welcome pivot from its past, and it’s poised to give even more customers a feel for its regional charm. The company reported just under a billion dollars in sales this year, and hopes that its newfound online presence grows its community.

As a longtime underdog in its industry, Hibbett is the type of company that makes thrives under the radar. It had for decades in smaller to mid-sized markets across the country, and now that it’s in a fresh quarter, it hopes to do the same on a bigger scale. That’s the thing about underdogs, they always give their all in the game.

There are more than 250 companies in our combined portfolios, and they are all making amazing advancements. From names you know, like Tesla, to those little gems you haven’t heard of yet, like Xylem, we want you to know all about what your holdings are up to. These ‘deep dives’ will help you understand what you’re invested into and how your dollars are making the world a better place.

HIbbett Sports is part of our Healthy Living portfolio.

https://www.hibbett.com/about-us-timeline.html

https://www.marketwatch.com/investing/stock/hibb/financials

https://seekingalpha.com/article/4102626-hibbett-sports-attractive-levels

https://seekingalpha.com/article/4119695-hibbett-sports-stay-far-far-away

https://www.forbes.com/companies/hibbett-sports/

https://realmoney.thestreet.com/articles/08/21/2017/hibbett-sports-worth-shot-after-sporting-goods-misses

http://fortune.com/2017/07/24/hibbet-sports-sales-nike-dicks/

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