Cabela's 2007 Annual Report Download - page 9

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3
Store Locations and Ownership. We currently own 24 of our 27 retail stores. However, in connection with
some of the economic development packages received from state or local governments where our stores are located,
we have entered into agreements granting ownership of the taxidermy, diorama, or other portions of our stores to
these state and local governments. Refer to Item 2 –“Properties” for the locations of our stores.
Direct Business
Our Direct business uses catalogs and the Internet as marketing tools to generate sales orders via the Internet,
telephone, and mail. Our Direct business generated revenue of $1.13 billion in 2007, representing 52.0% of our total
revenue from our Retail and Direct businesses.
Catalog Distributions. We have been marketing our products through our print catalog distributions to our
customers and potential customers for over 46 years. We believe that our catalog distributions have been one of the
primary drivers of the growth of our brand and serve as an important marketing tool for our Retail business. In 2007,
we mailed more than 140 million catalogs to all 50 states and to more than 170 countries. Our master catalogs offer
a broad range of products while our specialty catalogs offer products focused on one outdoor activity, such as fly
fishing, archery, or waterfowl, or one product category, such as women’s clothing.
Many of our customers read and browse our catalogs, but order products through our website. Based on our
customer surveys, we believe that our customers wish to continue to receive catalogs even though they purchase
merchandise and services through our website. Accordingly, we remain committed to marketing our products
through our catalogs, as we view our catalogs and the Internet as a unified selling and marketing tool.
Direct Business Marketing. We use our customer database to ensure that customers receive catalogs matching
their merchandise preferences, to identify new customers, and to cross-sell merchandise to existing customers. The
costs of providing our catalogs continue to increase as postage and printing prices increase. We utilize our marketing
knowledge base to determine optimal circulation strategies to decrease our catalog costs while continuing to grow
our business. We also market our products through our website which has a number of features, including product
information and ordering capabilities, and general information on the outdoor lifestyle. This cost-effective medium
is designed to offer a convenient, highly visual, user-friendly, and secure online shopping option for new and existing
customers. In addition to the ability to order the same products available in our catalogs, our website gives customers
the ability to purchase gift certificates, research outdoor activities, purchase rare and highly specialized merchandise,
and choose from other services we provide. The number of visits to our website increased 30.2% in 2007 compared
to 2006. Our website was the most visited sports and fitness website in 2007 according to Hitwise, Incorporated, an
online measurement company.
Direct Business Acquisitions. We have acquired selected other businesses that comprise a portion of our
Direct business, which we believe are an extension of our core competencies. These businesses include Van Dyke’s
Restorers, offering home restoration products; Van Dyke’s Taxidermy, offering taxidermy supplies; Antique Home
and Hardware, offering home decorating items; Wild Wings, offering wildlife prints and other collectibles; the
Ducks Unlimited catalog, offering waterfowl products; and Dunn’s, offering hunting dog equipment and high-end
hunting accessories. In 1996, we acquired the assets of the Gander Mountain direct business and integrated them
into our business.
Financial Services Business
Through our wholly-owned subsidiary, World’s Foremost Bank, we issue and manage the Cabela’s CLUB
Visa card and related customer loyalty rewards program. We believe the Cabela’s CLUB Visa card loyalty rewards
program is an effective vehicle for strengthening our relationships with our customers, enhancing our brand name,
and increasing our merchandise revenue. The primary purpose of our Financial Services business is to provide our
merchandise customers with a rewards program that will enhance revenue, profitability, and customer loyalty in our
Retail and Direct businesses.
Our bank subsidiary is an FDIC-insured, special purpose, Nebraska state-chartered bank. Our bank’s charter
is limited to issuing credit cards and selling brokered certificates of deposit of $100,000 or more and it does not
accept demand deposits or make non-credit card loans. During 2007, we had an average of 987,411 active accounts
with an average balance of $1,712.