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The link above is to the Susquehanna website, but not the report. As a subscriber to their sportswear analysis service I receive reports on the various footwear companies on the stock market. I can’t share the entire details of the report, but one quote by Sam Poser stood out and reminded me that I didn’t think highly of Hibbett Sports’ decision to place Michael Longo as the CEO of $HIBB:
The decision not to temporarily close stores during the coronavirus outbreak puts the health and well being of HIBB’s customers and employees, as well as the health and well-being of Hibbett’s historically very good reputation, at risk.
5 Thoughts on Hibbett Sports Being Led by City Gear’s CEO $HIBB
In the post linked above I wrote this sentence, “I do know that the momentum of $HIBB was created in house with a 21 year veteran and moving an outsider into the CEO’s chair is akin to a coaching staff being forced to remain on board when a new head coach is hired. In sports that doesn’t end well. I don’t think it ends well here either.”
Sam Poser in his recent e-mail makes it clear that Hibbett Sports is exceeding expectations and still performing well. I tend to associate that with the predecessor Jeff Rosenthal who guided the team through an expansion and the amazing e-commerce introduction that saved the company. I have to assume that Rosenthal would see the inherent problem with leaving the stores open at this critical time. More important, Hibbett Sports is operating without debt and showing considerable growth. Why would the company remain open at this time?
Longo states that the stores are in rural areas and don’t see the traffic that city accounts would see. What I see here is a person willing to risk the lives of employees and customers who won’t see COVID-19 as a realistic threat. In small towns this is not a good thing as access to medical care is often a more difficult process. Social distancing requires a full commitment or it doesn’t take hold. If people in the home see family members continuing to work, they will not consider the dangers around the virus. This could lead to extended travel to different locations.
I almost want to state that the decision to remain open is the thought process of a person who functions in a different class and doesn’t see the problems associated with his employees as considerable. When you consider many of the stores owned by Hibbett Sports are helmed and staffed by African-Americans the decision by Longo is akin to an article I wrote in the past that was not well received:
Hibbett Sports Has More To Fix With City Gear Than They Think
In the post linked above I wrote this:
I’ve witnessed employees arrive at 6:30 to prepare for special release sneaker launches who stay until closing time. I’ve been told personally by employees that they’ve missed doctor’s appointments, but they are so afraid to lose their jobs that they don’t fight. Because City Gear is an urban chain and Memphis is a 70% Black population, the company risks claims of racism (the majority of positions in the C suite are held by White people) and mistreatment of employees that if the employees took the time to organize, an Employment Rights Attorney would have enough evidence to drag City Gear into a battle that they would lose.
When I wrote this I had District Managers and Managers inbox me to say that this is not the case with all City Gear stores. I think with this current decision by Longo to keep stores open, what I wrote becomes much more relevant today.
I write this as an opinion that I fully expect to be challenged. I don’t gain anything from writing a post like this. As a matter of fact it could hurt, but having taught in small towns like Ashland, Mississippi, I know the devastation that could take place if someone got sick and didn’t know it. In most small towns parents and grandparents often live in the same homes. Young people will travel to bigger cities creating opportunity for the virus to travel. People in small towns in the south working for Hibbett/City Gear may be traveling from real small towns to big small towns and if the symptoms don’t show up for two weeks, those employees going from Senatobia to Grenada (Mississippi) or from Mound Bayou to Clarksdale (Mississippi), or from Brownsville to Jackson (Tennessee), could be incubators for the virus spreading to small towns that don’t have the medical capabilities to deal with the potential outcome.
Here is the worst part of the discussion. Hibbett Sports gets Yeezy sneakers. The people in Memphis who aren’t taking the virus seriously and are still selling through StockX and GOAT are leaving Memphis and going to small towns looking for deals now that their options in shopping are limited with the closing of other stores and brand stores. Memphis is a city with 700,000 people and the mayor just issued a shutdown of all non-critical or essential businesses. Memphis by default is connected to every small town in the Tri-State area of Arkansas, Mississippi and Tennessee.
Sam Poser states clearly that $HIBB is in very good shape and
HIBB beat revenue expectations driven by a 37% increase in e-commerce sales… HIBB has no debt on the balance sheet and ample liquidity and financial wherewithal to endure the current challenging environment. Further, HIBB expects no delays to the supply chain in 1Q20 and the launch calendar remains intact (for now).
If $HIBB’s business is functioning at this level this decision to remain open doesn’t make sense.
I’m not a healthcare professional and I don’t have all of the answers, but this seems very shortsighted and it lacks the reality of what resellers and flippers are willing to do to make a dollar. I’m sure the deliberations by the new CEO didn’t consider this as well. Employees don’t want to lose money and I understand this, but Hibbett Sports should be closed.
Note: Hibbett Sports is offering curbside pickup.
