Cabela's 2008 Annual Report Download - page 9

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4
PART I
ITEM 1. BUSINESS
Overview
We are a leading specialty retailer, and the world’s largest direct marketer, of hunting, fishing, camping, and
related outdoor merchandise. Since our founding in 1961, Cabela’s has grown to become one of the most well-
known outdoor recreation brands in the world. We have long been recognized as the “World’s Foremost Outfitter.”
Through our growing number of retail stores, and our well-established direct business, we believe we offer the
widest and most distinctive selection of high-quality outdoor products at competitive prices, while providing superior
customer service. We also issue the Cabela’s CLUB Visa® credit card, which serves as our primary customer loyalty
rewards program. Refer to Note 23 entitled “Segment Reporting” to our consolidated financial statements and our
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional financial
information regarding our Retail and Direct businesses, as well as our Financial Services business.
We were initially incorporated as a Nebraska corporation in 1965 and were reincorporated as a Delaware
corporation in January 2004. In June 2004, we completed our initial public offering of common stock. Our common
stock is listed on the New York Stock Exchange under the symbol “CAB.”
Retail Business
We currently operate 29 retail stores, 28 in 20 states and one in Canada. We opened two retail stores in 2008,
increasing our total retail square footage by 5%. Retail store total square footage was 4.3 million square feet at the
end of 2008. The two retail stores opened in 2008 were in Scarborough, Maine, and Rapid City, South Dakota. Our
Retail store business operations generated revenue of $1.3 billion in 2008, representing 54.0% of our total revenue
from our Retail and Direct businesses.
Customer Service Enhancements. In 2008, we completed implementation of customer service enhancements
directed at increasing sales and customer satisfaction in our retail stores. These enhancements included: 1) in-store
pickup for Internet website orders, 2) installation of Internet kiosks, and 3) the installation of catalog order desks.
We continue to advance our efforts for offering customers integrated opportunities to access and use our retail
store, catalog, and Internet channels. Our in-store pick-up program allows customers to order products through our
catalogs and Internet site and have them delivered to the retail store of their choice without incurring shipping costs,
increasing foot traffic in our stores. Conversely, our expanding retail stores introduce customers to our Internet and
catalog channels. Our multi-channel model employs the same merchandising team, distribution centers, customer
database, and infrastructure, which we intend to further leverage by building on the strengths of each channel.
Store Format and Atmosphere. Our retail store concept is designed to appeal to the entire family and draw
customers from a broad geographic and demographic range. Our retail stores range in size from 35,000 to 246,000
square feet and our large-format retail stores are 150,000 square feet or larger. Our large-format retail stores have
been recognized in some states as one of the top tourist attractions, often attracting the construction and development
of hotels, restaurants, and other retail establishments in areas adjacent to these stores. Our next generation store
format, with more standardized store sizes, will expedite store development time and allow us to pursue the best
retail locations.
Retail Store Expansion Strategy. Enhancing our retail store efficiencies and taking the necessary steps to
improve our financial performance is a high priority in our strategic planning. As such, we continually review our
previously announced stores to reconfirm our expectations based on what we have learned over the past year. Based
on these ongoing reviews, we now expect to open one retail store in 2009 – in Billings, Montana, which is expected
to open in the second quarter of 2009. We expect to fund our 2009 expansion from operating cash flows. Our next
generation store format is intended to improve our return on invested capital and will better serve our customers.
Our acquisition in 2007 of S.I.R. Warehouse Sports in Winnipeg, Manitoba, will serve as our platform for planned
expansion into Canada.