Cabela's 2010 Annual Report Download - page 28

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If we lose key management or are unable to attract and retain the talent required for our business, our
operating results could suffer.
Our future success depends to a significant degree on the skills, experience, and efforts of our senior
executive management and merchandising teams. With the exception of our Chairman, Richard N. Cabela, our
Vice Chairmen, James W. Cabela and Dennis Highby, and our President and Chief Executive Officer, Thomas
L. Millner, none of our senior management has employment agreements other than our Management Change
of Control Severance Agreements. We do not carry key-man life insurance on any of our executives or key
management personnel. In addition, our corporate headquarters is located in a sparsely populated rural area
which may make it difficult to attract and retain qualified individuals for key management positions. The loss
of the services of any of these individuals or the inability to attract and retain qualified individuals for our key
management positions could cause our operating results to suffer.
Our business depends on our ability to meet our labor needs, and if we are unable to do so, our retail
store expansion strategy may be delayed and our revenue growth may suffer.
Our success depends on hiring, training, managing, and retaining quality managers, sales associates, and
employees in our retail stores and customer care centers. Our corporate headquarters, distribution centers, return
center, and some of our retail stores are located in sparsely populated rural areas. It may be difficult to attract
and retain qualified personnel, especially management and technical personnel, in these areas. Competition for
qualified management and technical employees could require us to pay higher wages or grant above market levels
of stock compensation to attract a sufficient number of employees. If we are unable to attract and retain qualified
personnel as needed, the implementation of our retail store expansion strategy may be delayed and our revenue
growth may suffer.
A natural disaster or other disruption at our distribution centers or return facility could cause us to
lose merchandise and be unable to effectively deliver to our direct customers and retail stores.
We currently rely on distribution centers in Sidney, Nebraska; Prairie du Chien, Wisconsin; Wheeling,
West Virginia; and Winnipeg, Manitoba, to handle our distribution needs. We operate a return center in Oshkosh,
Nebraska; and our Wheeling, West Virginia, distribution center also processes returns. Any natural disaster or
other serious disruption to these centers due to fire, tornado, or any other calamity could damage a significant
portion of our inventory and materially impair our ability to adequately stock our retail stores, deliver merchandise
to customers, and process returns to vendors and could result in lost revenue, increased costs, and reduced profits.
New state tax initiatives could subject us to liability for past sales and cause our future Direct business
sales to decrease.
A number of states have adopted initiatives, or are considering adopting initiatives, that require Internet
retailers operating “affiliate programs” in the state to collect sales tax on the retailer’s sales to residents in these
states. We believe that affiliate programs do not create nexus with a state and that these initiatives are inconsistent
with the United States Supreme Court’s holding that states, absent congressional legislation, may not impose
tax collection obligations on out-of-state direct marketers unless the out-of-state direct marketer has nexus with
the state. If these initiatives are successful, we could be required to collect sales taxes in additional states. The
imposition by state governments of sales tax collection obligations on out-of-state direct marketers who participate
in Internet commerce could create additional administrative burdens for us, put us at a competitive disadvantage if
they do not impose similar obligations on our competitors, and decrease our future Direct sales.
We must successfully order and manage our inventory to reflect customer demand and anticipate
changing consumer preferences and buying trends or our revenue and profitability will be adversely affected.
Our success depends upon our ability to successfully manage our inventory and to anticipate and respond
to merchandise trends and customer demands in a timely manner. We cannot predict consumer preferences with
certainty and they may change over time. We usually must order merchandise well in advance of the applicable