Cabela's 2008 Annual Report Download - page 10

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5
Store Locations and Ownership. We currently own 24 of our 29 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 $1.1 billion in 2008, representing 46.0% 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 47 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 2008,
we mailed more than 133 million catalogs to all 50 states and to more than 190 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 control our catalog costs while continuing to grow
our business. We also market our products through our website. 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 review product information, purchase gift certificates, research general information on the outdoor lifestyle and
outdoor activities, purchase rare and highly specialized merchandise, and choose from other services we provide.
The number of visits to our website increased 32.0% in 2008 compared to 2007. Our website was the most visited
sports and fitness website in 2008 according to Hitwise, Incorporated, an online measurement company.
Direct Business Acquisitions. In prior years, we 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; and Wild Wings, offering wildlife prints and other
collectibles.
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 2008, we had an average of 1,140,834 active credit card
accounts with an average balance of $1,828 compared to an average of 987,411 active credit card accounts with an
average balance of $1,712 during 2007.