Dick’s to roll out Lids in-store shops at more than 100 locations

Sports headwear seller Lids is opening shop-in-shop sites at Dick's Sporting Goods stores, the latest retailer to piggyback on the real estate of a large national chain.

Pittsburgh-based Dick's on Monday unveiled its partnership with Lids, a seller of licensed and branded hats. Under the deal, Lids shops have already opened in 46 Dick's stores nationally and will be in more than 100 stores by the late summer.

Shop-in-shop locations are an established way for retailers to broaden their reach — physically and in terms of customers. Kohl's rolled out Sephora in-store beauty shops across its fleet and then added Babies R Us shops to the mix. Macy's has had Toys R Us in-store shops for years.

The deals don't always work: Ulta Beauty and Target agreed not to renew their pact for the makeup retailer to have shops at the discount chain.

Dick's, with more than 3,000 stores globally, is also trying out something else new this summer: It is testing pop-up stores that feature some of its private brands in the Hamptons on New York's Long Island, an initiative it announced in a blog last month.

The first foray, for Dick's men's-and-women's-golf-apparel brand, Walter Hagen, already debuted in East Hampton. It's timed to the 126th U.S. Open Championship at Shinnecock Hills Golf Club. The rotating pop-ups will run through Oct. 18.

Dick’s is "doubling down on making itself relevant to consumers," according to Neil Saunders, a retail analyst and managing director at analytics firm GlobalData.

"As one of the best performing retailers over recent years, it needs to keep moving forward to ensure continued sales growth," Saunders said in an email to CoStar News. "Both the Lids collaboration and the Hamptons pop-up are ways of doing this. Lids will help cement Dick’s appeal with fans while the pop-up, although small scale, helps showcase Dick’s own brands to high spending individuals."

Dick's didn't respond to an email from CoStar News seeking comment on Saunders' remarks.

But in its statement, the retailer said that its new "partnership will expand access to Lids' industry-leading assortment of licensed headwear while enhancing the in-store experience for sports fans."

The shop-in-shops "will feel immersive with the Lids-brand and include fixtures and merchandising that showcase Lids' extensive assortment" of headwear, according to Dick's.

"Our athletes are increasingly looking for new ways to rep their favorite teams, their style and the latest trends," David Progar, senior vice president, licensed at Dick's, said in a statement. "By partnering with Lids, a leader in licensed headwear, we'll be able to offer them more choices to meet their needs for sport, lifestyle and fandom."

The Lids chain was acquired in 2019 by private equity firm Ames Watson, based in Columbia, Maryland. Last year, Ames Watson paid $140 million to acquire roughly 1,000 tween retailer Claire's stores out of Chapter 11 bankruptcy, keeping it alive.

Ames Watson didn't respond to an email from CoStar News seeking comment on the Dick's partnership.

"Lids has long been the leader in licensed headwear, and this partnership allows us to bring that expertise directly into Dick's stores across the country," Lawrence Berger, the retailer's chairman, said in a statement.

He added that "together, we're creating a dedicated destination within Dick's where fans can find the most comprehensive assortment of team headwear and a new in-store experience."

In addition to product assortment, Dick's said it will collaborate with Lids on in-store product training for Dick's teammates and visual merchandising.

The Dick's Hamptons rotating pop-ups will feature not only Walter Hagen but also its Maxfli, Calia and DSG brands, according to the retailer.

"A departure from the traditional Dick’s Sporting Goods footprint, this boutique-style pop-up will serve as a standalone expression of our in-house brands," the chain said in its blog.

It added that "through interchanging product collections and brand activations — ranging from exclusive capsule launches to pro-led masterclasses — the shop will offer curated experiences to the local East Hampton community."

Some retailers have spun off their private brands into standalone chains. In one case, Victoria's Secret opened Pink stores.

Dick's is still in the process of integrating and trying to turn around sneaker retailer Foot Locker, which it purchased for $2.4 billion last September.