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Retailer: Rival CEO posed as exec to steal secrets

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Photo by Jason Decrow/Invision for ACES, Inc/AP Images

Modell’s Sporting Goods CEO Mitchell Modell attends ACES All Stars 2013 Celebrate with Grey Goose Vodka, at Marquee in New York, July 14, 2013.

TRENTON, N.J. — The CEO of a sporting goods chain who once appeared on the TV show "Undercover Boss" pretended to be an executive from a rival company in an effort to get confidential information, according to a lawsuit.

Dick's Sporting Goods claims in a lawsuit filed Feb. 20 in Mercer County Court that Mitchell Modell, CEO of Modell's Sporting Goods, showed up at a Dick's store in Princeton in February saying he was a Dick's senior vice president. The lawsuit was first reported Friday by The Record newspaper (http://bit.ly/1dJeWqz ).

Dick's alleges Modell told employees he was to meet the Dick's CEO there and persuaded workers to show him the backroom of the store and to answer questions about the business. Modell gathered information about online sales, including a "ship from store" program that gets products to customers' doors quickly, the lawsuit said.

A Dick's spokesman said company policy prevented him from commenting on pending litigation. Modell's general counsel, Doug Epstein, declined to comment Friday.

Retailers spy on each other all the time. In his autobiography, Wal-Mart Stores Inc. founder Sam Walton writes about covert shopping trips to keep tabs on rivals like Kmart and Price Club.

"Ever since retailers first started having cash registers, retailers have scouted each other's stores," said Burt Flickinger III, president of retail consultancy Strategic Resource Group.

But if the lawsuit's allegations are true, this appears to be a particularly egregious case. It is rare that a CEO would actually get caught misrepresenting himself to store employees, experts say.

"What happens all day every day is retailers go to their competitors' stores and probably and certainly don't disclose who they are," said RBC Capital Markets analyst Sean McGowan. "But I can't think of any instances where a retailer represents he is an executive to gain access."

Dick's accuses its rival of civil conspiracy and trespass and is seeking attorneys' fees and a judge's order to prevent Modell and his workers from entering nonpublic areas of Dick's stores or posing as employees.

In 2012, Mitchell Modell shaved his head and put on an oversized mustache to pose as a low-level employee on the CBS show "Undercover Boss." He later said the experience taught him how physically demanding warehouse work was and led to staffing and workload changes throughout the company.

His New York-based chain has more than 150 stores, mostly in the Northeast. Dick's, based in Pittsburgh, is a publicly traded company with more than 550 stores nationwide.

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