Sports gear retailer,
Hibbett Sports Inc.
(
HIBB
) plans to shift its Birmingham-based wholesaling and logistics
facility to Alabaster, Alabama. As a first move toward this goal,
the company has purchased 60 acres construction site next to the
Shelby airport. The company plans to begin construction at the site
in fall 2012, while it expects full-fledged operations at the
facility latest by fall 2014.
The completion of the new distribution center is expected to
double the size of Hibbett's presently operating center in
Birmingham. The new facility will be spread across a 360,000 square
feet area, while the Birmingham center currently encloses only
180,000 square feet of space. Additionally, the new center will
have the potential to be further expanded up to 500,000 square
feet.
This plan of expanding the capacity of its wholesaling and
logistics facility fully supports Hibbett's ongoing store expansion
program. The company expects this large distribution facility to
enable it to grow its store count to over 2,000 stores. We note
that the company's present Birmingham facility has helped it to
expand from 67 stores to about 835 stores through the end of the
first quarter of 2012. Further, the new facility will aid the
company's continued growth in mid-sized and smaller markets, which
is the company's primary focus.
Hibbett's core strategy is to expand its foothold in small towns
and counties with population sizes of 25,000 to 75,000, positioning
it well to benefit from its strategic mix of branded as well as
localized merchandise that suit the community's interest. We
believe this gives the company a competitive edge over larger
rivals, such as
Dick's Sporting Goods Inc.
(
DKS
) and
Big 5 Sporting Goods Corporation
(
BGFV
).
In addition, Hibbett has a healthy balance sheet with no debt.
This offers Hibbett the financial flexibility to open new stores
and identify new market or location for future expansion.
Currently, Hibbett holds a Zacks #2 Rank, implying a short-term
'Buy' rating on the stock. We retain our long-term 'Outperform'
recommendation on the stock.
BIG 5 SPORTING (BGFV): Free Stock Analysis
Report
DICKS SPRTG GDS (DKS): Free Stock Analysis
Report
HIBBET SPORTS (HIBB): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research