Cabela's 2009 Annual Report Download - page 42

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Current Year Achievements
During 2009 we focused on improving our retail store operating metrics. We slowed our planned new store
opening schedule to one store in 2009 in order to focus on Retail operations and to manage capital expenditures. Our
focus for 2009 was to also make progress on the following initiatives:
• to improve our advertising strategy by using more targeted campaigns throughout our multi-channel model
to increase store traffic;
• to improve retail store sales and profitability through enhanced product assortment, streamlining the flow
of merchandise to our retail stores, and reducing operating expenses;
• to manage the merchandise gross margins of our sales channels effectively;
• to improve inventory management by actively managing quantities and product deliveries through enhanced
leveraging of existing technologies, and by reducing unproductive inventory; and
• to reduce catalog costs with a nominal impact on revenue.
Inventory levels at January 2, 2010, were $440 million compared to $518 million at December 27, 2008, a
reduction of $78 million. Total debt was reduced $32 million to $348 million at January 2, 2010, compared to $380
million at December 27, 2008, with no balance outstanding at January 2, 2010, on our credit facility. In addition, cash
flows from operations were $294 million in 2009 compared to $155 million in 2008, an increase of $139 million.
Retail Store Openings – Our new store in Billings, Montana, which opened in May 2009, increased our total
retail store square footage by 80,000 square feet bringing our total retail square footage to over 4.3 million square
feet at the end of 2009. We incorporated our next generation store concept into this store which has exceeded our
expectations with its efficiency and improved productivity.
Retail Store Efficiencies – We improved our retail store merchandising processes, management information
systems, and distribution and logistics capabilities. We improved our visual merchandising within the stores and
coordinated merchandise at our stores by adding more seasonal product assortments. Also, we streamlined the flow
of merchandise to our stores increasing productivity and reducing labor costs as a percentage of revenue. To enhance
customer service at our retail stores, we continue to focus on our customer service through training and mentoring
programs. Operating income for our Retail business segment increased $21 million over 2008 to $163 million in
2009, or 15.1%. Operating income as a percentage of Retail business segment revenue was 11.7% in 2009, an increase
of 70 basis points over 2008.
Retail Achievements – We were recognized as a top customer service retailer in 2009 by the following:
• Cabela’s won the Netkey 2009 Self-Service Excellence Award for “Best Overall Software Solution” for our
in-store interactive kiosk program.
• Included in the Top 14 for superior customer service conducted by BIGResearch in the 2009 annual survey
sponsored by American Express honoring retailers across all channels and formats.
• Ranked among the top retailers for superior customer service and business functionality in the industry
monitoring agencies Sporting Goods Business and Multichannel Merchant.
We have also partnered with FLW Outdoors, the largest fishing tournament organization in the world, to be the
official and exclusive outdoor retailer, as well as the official rain gear, for FLW Outdoors.
Leverage Our Multi-Channel Model – We offer our customers integrated opportunities to access and use
our retail store, Internet, and catalog 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, thereby helping to increase foot traffic in our stores. Conversely, our expanding retail stores introduce
customers to our Internet and catalog channels. We are capitalizing on our multi-channel model by building on
the strengths of each channel, primarily through improvements in our merchandise planning system. This system,
along with our replenishment system, allows us to identify the correct product mix in each of our retail stores, and
also helps maintain the proper inventory levels to satisfy customer demand in both our Retail and Direct business
channels, and to improve our distribution efficiencies.