Cabela's

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Cabela's
Type Public
Traded as NYSECAB
Industry Retail
Founded Chappell, Nebraska, U.S. (1961)
Founders Dick Cabela
Jim Cabela
Headquarters Sidney, Nebraska
Number of locations 60 stores (2014)
Key people Dick Cabela (Co-founder, Chairman)
Jim Cabela (Co-founder, Vice Chairman)
Thomas Millner (CEO)
Michael Copeland (Chief operating officer)
Brian Linneman (Senior Vice President of Merchandising and Marketing)
Ralph Castner (Chief Financial Officer)
Products Hunting, fishing, and outdoor merchandise
Revenue Increase US$2.7 billion (2010)
Operating income Increase US$186.8 million (2010)
Net income Increase US$112.1 million (2010)
Employees 14,800 (2012)
Website www.cabelas.com

Cabela's Incorporated is a direct marketer and specialty retailer of hunting, fishing, camping, shooting, and related outdoor recreation merchandise, based in Sidney, Nebraska. The company was founded by Richard N. Cabela in 1961 and went public in 2004, with that fiscal year's revenue reaching $1.56 billion, a 50% growth since 2001. As of December 2013, the company has performed strongly in the $646 billion outdoor recreation sector with a stock price gain of close to 50% and consolidated revenue moved up 14.8% year-over-year to $850.8 million. Earnings per share came in at $0.70 which was higher than 2012's earnings of $0.60 per share.[1]

It also has "Trophy Properties LLC" (a real estate market), "Outdoor Adventures" (hunting and fishing trips), the "Gun Library" (for buying and selling new, used, and collectible firearms), and World's Foremost Bank (the issuer of Cabela's Club Visa credit cards). Its direct marketing operation is one of the largest in the United States. Cabela's mail-order catalogs are shipped to 50 states and 120 countries. More than 120 million catalogs were mailed in its first year as a public company.[2]

History[edit]

The company that would become sporting goods reseller and chain was started in 1961. Dick Cabela purchased US$45 worth of fishing flies at a furniture expo in Chicago which were advertised for sale via an advertisement in a local newspaper.[3] When his first effort produced only one response, he placed an ad in a national magazine, Sports Afield, which was more successful. Included with each order was a catalog of other products for sale by Cabela.[3]

As the business grew, Cabela and his wife Mary moved their operation to Sidney, Nebraska in 1963. Dick's brother Jim also joined the business. From those modest beginnings, the company has since grown to a publicly traded corporation with over US$3 Billion in annual sales.[4]

On February 17, 2014, founder Dick Cabela passed away peacefully at his home in Sidney, Nebraska at the age of 77.

Operations and ownership[edit]

Founders Dick and Mary Cabela and Dick’s brother James Cabela retained 25% ownership of the now public company which trades under the stock symbol CAB.

About half of Cabela’s sales come from hunting-related merchandise with about a third derived from the sale of firearms, ammunition and accessories in 2012. Additionally, in 2012 30% of revenue came from direct sales (through catalog and online orders), and 59% from physical retail stores. The remaining 11% of revenue came from its financial subsidiary and credit card business.[2]

In 1996 Gander Mountain, prior to declaring bankruptcy, sold its mail order business to Cabela's with a no-compete clause. In 2007, Cabelas brought suit against them to prevent their re-entry into the mail-order business. Gander Mountain won the lawsuit and began selling online as well.[5]

In February 2013, Cabela's sued Gander Mountain for patent infringement over a fold-up cot that Gander was selling.[5]

Retail stores[edit]

Cabelas Store in Wheeling, West Virginia.

Cabela's has a distinctive look to its retail operations, a look which turns its retail stores into tourist attractions. The stores are more like cavernous showrooms, bringing the outdoors inside. They feature museum-quality displays of taxidermied wildlife, large aquariums, indoor mountains, and archery ranges. The success of the format is illustrated by the company's Kansas City, Kansas store at over 180,000 square feet (17,000 m2), which attracted more than four million customer visits in one year. Currently, the largest Cabela's retail facility is in Hamburg, Pennsylvania, with more than 250,000 square feet (23,000 m2) of floor space.

Plans for international expansion began to develop, and in 2007, Cabela's purchased family-owned S.I.R. Warehouse Sports Store in Winnipeg, Manitoba.[6] In 2010, the Canadian Head Office and Distribution Centre moved across the city, leaving the original location as only a retail store. The company had intended to be a part of the 1,400,000-square-foot (130,000 m2) Lac-Mirabel project near Montreal, which was to include 220,000 square feet (20,000 m2) of retail space, and was planned to open in 2008.[7] But instead, rival chain Bass Pro Shops became one of the mall anchors.[8] In 2011 Cabela's opened a 70,000-square-foot (6,500 m2) store in Edmonton, Alberta and in 2012 opened a 50,000-square-foot (4,600 m2) store in Saskatoon, Saskatchewan.

Gun Library

The 85,000-square-foot (7,900 m2)[9] store just off Interstate 80 on the southern edge of Sidney, Nebraska illustrates some of the elements. The grounds include a 3 12 acre pond and two bronze double-life-size bull elk on one side of the building. Inside, moss rock pillars hold trophy elks of huge proportions. A 27-foot (8 m)-tall replica of a mountain is framed in a 48-foot (15 m) mural of blue sky. The mountain is covered with 40 lifelike game trophies and features a waterfall that splits at the base into two ponds. Suspended in the air between the entryway and the mountain is a flock of stuffed Canada geese.

Their retail showrooms include a restaurant, a gun library, where one can see examples of the gunmaker's art, and a travel service, where customers can plan trips to anywhere in the world. The Boise, Idaho location is home to a museum dedicated to Elmer Keith.[10] The Cabela's in Maine has an amusement park style shooting gallery, featuring handguns and rifles.

The newest Cabela's retail store (opened August 7, 2014) in Cheektowaga, NY, is the 54th retail location. Another 9 stores, including Garner, North Carolina: and Fort Mill, South Carolina, a suburb of Charlotte, are currently slated to open in 2015. The company has announced plans to nearly double its number of current retail locations within the next four years.

Cabela's Outposts[edit]

In early 2012, Cabela's unveiled a new retail initiative called Cabela's Outpost Stores. According to the press release for the Union Gap, Washington, location, they "will introduce the unique Cabela's retail experience to customers in underserved markets across the United States and Canada".[11] The first outpost store opened in Union Gap in the fall of 2012.

Banking and finance[edit]

Founded on March 23, 2001 (FDIC Certificate #57079), Cabela's financial subsidiary is named World’s Foremost Bank (WFB, a play on Cabela’s marketing moniker, World’s Foremost Outfitter).[12] The bank's primary activity is as a credit card issuer for the Cabela’s CLUB Visa card, a branded rewards card. With 11% of total sales attributed to the subsidiary, it is ranked as the 13th largest issuer of credit cards in 2013.[2] Roughly a third of Cabela's customers have Cabela's Club VISA card.[13]

The subsidiary consists of a single-branch bank with a deposit market share in the state of Nebraska of just under 1.2 percent, with $505 million in deposits as of 2011.[14] As of the end of 2012 the bank claimed to have US$3,731,567,000 in assets.[15]

Sean Baker was appointed President of World’s Foremost Bank and Chief Executive Officer on January 1, 2013. Mr. Baker replaced Joseph M. Friebe, whose planned retirement was announced in June 2012.[16]

2011 FDIC settlement[edit]

In its annual report, Cabela's announced that it has reached a settlement with the Federal Deposit Insurance Corporation (FDIC) regarding its credit card policies and practices. It was ordered to repay wronged cardholders $10 million plus a $250,000 penalty.[13][17] The subsidiary did not admit to or deny the FDIC's finding, but agreed to do the following:

  • Refrain from the Bank's prior practice of contacting a cardholder at the cardholder's place of employment for purposes of collecting a debt after a verbal or written request is made by either the cardholder or the cardholder's employer to cease such contact because the cardholder's employer prohibits such communications.
  • Refrain from the Bank's prior practice of assessing a penalty interest rate on balances that existed prior to the event that caused the penalty interest rate to be imposed.
  • Refrain from the Bank's prior practice of assessing late fees when periodic payments are due on Sundays or holidays and the payment is posted the following business day.
  • Refrain from the Bank's prior practice of assessing a second over-the-credit-limit fee (OL fee) on the first day of a billing cycle when a cardholder exceeded his or her credit limit during the prior billing cycle, was assessed an over limit fee during the prior billing cycle and was over limit at the end of that billing cycle and through the beginning of the next billing cycle.
  • Refrain from the Bank's prior practice of imposing an over limit fee if such fee is imposed as a result of applying a cardholder's reduced credit limit to balances that preceded the date of a credit line decrease, or imposing an over limit fee if such fee is imposed solely as a result of a credit line decrease at the end of the billing cycle without adequate notice.
  • Refrain from the Bank's prior practice of establishing a minimum periodic payment amount that is insufficient to avoid recurring OL fees.
  • Refrain from the Bank's prior practice of implementing an increase in penalty rates without providing adequate notice to cardholders, as required by 12 C.F.R. § 226.9.[13][17]

Additionally the FDIC required WFB to make certain changes in their management policy to increase oversight of their credit card business and to prevent further unfair practices.

2011 Royal Bank of Canada loan[edit]

The Bank entered into a $411.7 million commitment with the Royal Bank of Canada under a series of variable funding notes issued by Cabela's Credit Card Master Note Trust. The loan is for three years and accrues interest at a variable rate of commercial paper plus a spread.[16]

Television[edit]

Cabela's has produced several television series, which are called Cabela's Outfitter Journal and Cabela's Memories in the Field. They are broadcast on WildTV and The Outdoor Channel.

Video games[edit]

Cabela's has produced several series of video games for a variety of gaming platforms, including Cabela's Big Game Hunter series, Cabela's Dangerous Hunts series, and Cabela's Outdoor Adventures series.

See also[edit]

References[edit]

  1. ^ Singh, Amal. "Can More Upside Be Expected From Cabela’s?". The Motley Fool. Retrieved 16 December 2013. 
  2. ^ a b c Santoli, Michael. "Outdoor Enthusiasts Flock to Cabela’s, Investors Follow". Yahoo Finance. Retrieved 1 September 2013. 
  3. ^ a b Staff (May 2014). "Random Shots: In Memory: Richard "Dick" Cabela". American Rifleman 162 (5): 28. 
  4. ^ Richard Cabela, who co-founded outdoor gear retailer, dies at 77
  5. ^ a b Orrick, Dave. "Gander Mountain sues Cabela's over web addresses". TwinCities.com, Pioneer Press. Retrieved 16 December 2013. 
  6. ^ Canadian Broadcasting Corporation (2007-08-16). "U.S. firm buys longtime Winnipeg outfitter". CBC News. Retrieved 2007-08-16. 
  7. ^ Cabela's Montreal store Press Release Cabelas.com
  8. ^ Lac Mirabel press release
  9. ^ Cabelas.com
  10. ^ Huntington, Roy (2008). "Elmer Keith museum is open! Cabela's in Boise, new home". American Handgunner 29 (3): 127. 
  11. ^ "Cabela's® Unveils New Outpost Store Retail Initiative". cabelas.com. 2011-02-16. Retrieved 2010-08-15. 
  12. ^ Staff. "Commercial Banks; Company Overview of World’s Foremost Bank". Bloomberg Business. Retrieved 16 December 2013. 
  13. ^ a b c Barr, Colin. "World's foremost credit card ripoff: update". CNN Money. Retrieved 1 September 2013. 
  14. ^ Henderson, Tom. "Who's world's foremost bank? Not World's Foremost Bank – Cabela's Visa rewards program goes awry". Crain's Detroit Business. Retrieved 1 September 2013. 
  15. ^ Staff. "About Us". wfbcds.com. Retrieved 16 December 2013. 
  16. ^ a b "Company Overview of World’s Foremost Bank". BusinessWeek. Retrieved 1 September 2013. 
  17. ^ a b Staff. "CONSENT ORDER AND ORDER TO PAY FDIC-10-775b FDIC-10-777k In the Matter of WORLD'S FOREMOST BANK SIDNEY, NEBRASKA". fdic.gov. Retrieved 16 December 2013. 

External links[edit]