Key Takeaways
- Dick’s is the latest retailer to prioritize trading cards, opening Collectors Club Houses in some of its stores.
- Many sports and Pokémon cards are scooped up by adults, who see them as investments.
Americans’ love of trading cards has retailers lining up to sell them.
Dick’s Sporting Goods’ (DKS) has opened what it calls Collectors Club Houses in 20 shops, and plans to include them in more locations, CEO Lauren Hobart said on a conference call this week. The spaces, which feature trading cards and signed sports memorabilia, come as retailers rush to capitalize on soaring demand for collectibles.
Consumer response “has exceeded our expectations,” Hobart said, according to a transcript made available by Alpha Sense. “It’s a unique and fast-growing category that’s a great complement to everything we do, and we’re very excited about the opportunity ahead.”
Why This News Matters to Investors
Sports and Pokémon cards have beaten the S&P 500 in recent years, according to some estimates, but predicting their trajectory can be tricky. Collectibles don’t come with quarterly results, for example, and they don’t pay dividends. Baseball card prices crashed in the 90s after a period of overproduction.
Trading cards have become nearly ubiquitous, popping up everywhere from Costco Wholesale (COST) to mom-and-pop bodegas. Demand for “high-velocity items, such as Pokémon cards,” prompted Costco to create a digital waiting room for its e-commerce platform, CEO Ronald Vachris said. The cards are expected to be a hit this holiday season at Kohl’s (KSS), Best Buy (BBY) and Target (TGT), their executives said on conference calls this week.
Target has built up a diverse collectibles business, including Magic the Gathering, National Football League, Major League Baseball and Women’s National Basketball Association cards, chief commercial officer Rick Gomez said. It leaned into the category after trading cards at the big-box stores rose nearly 70% during the first six or seven months of the year, Gomez said in August.
Trading cards took off during the pandemic when Americans had extra cash from spending more time at home and collecting stimulus checks, The Wall Street Journal reported. The cards quickly grew into an investment craze: Baseball and Pokémon cards have both outperformed the S&P 500 in recent years, The Journal estimated.
One toy and game executive—Spin Master CEO Max Rangel– went so far as to estimate that the “majority of the industry’s growth was driven by adult-targeted building sets, strategic trading cards and sports trading cards” on a conference call this spring.
Toy companies will likely continue catering to adults, given that they can’t rely as much on the shrinking youth population, Bank of America analysts said.
“Retailers look to trading cards & collectibles categories to expand their customer demographic profile and offset softness in traditional toys from a decline in addressable population,” the analysts said this fall.
