Cabela's 2010 Annual Report Download - page 4

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and higher interchange income. For the year, average
active accounts increased 5.9 percent and the average
account balance increased 1.0 percent.
In 2010, we incurred impairment and other special charges
totaling $13.6 million pre-tax. These charges related to our
settlement of all matters related to a 2009 Federal Deposit
Insurance Corporation compliance examination as well as
non-cash asset impairment charges related to the
write-down of certain property and land to fair value.
Our balance sheet also saw signifi cant improvement in
2010 as we ended the year with just $345 million of debt
and generated $167 million of cash fl ows from operations.
The strength of our balance sheet and cash fl ows has
allowed us to self-fund the capital needs of our Cabela’s
CLUB Visa program and retail store expansion, and solidify
our strong position with vendor partners in an uncertain
global economic environment.
2012 Vision Update
In 2009, we developed a long-term strategic plan for
the Company, which we refer to as our 2012 Vision. 2010
marked the fi rst full year of this three-year plan, and I
would like to provide an update on its status. As you will
recall, we formally communicated our 2012 Vision to the
organization in the third quarter of 2009 and followed
with a realignment of our executive leadership team in
January 2010 to ensure responsibilities were aligned
with our plan.
As a normal part of our strategic planning process, our
executive leadership team assembled in mid-summer
2010 to examine whether our strategic initiatives should
be adjusted as we moved toward 2011. I am pleased to
report our leadership team remains convinced not only
of the strategic initiatives’ validity, but also in our ability
to attain their imbedded goals by the end of 2012.
Our Vision is to become the best multi-channel
outdoor retail company in the world by the end of
2012. To accomplish this goal, we must passionately
serve and please every customer every day; celebrate
and reward passion, innovation, and results with our
employees; and achieve profi table growth with superior
returns for our owners. These three pillars of the plan
form our Circles of Excellence: Customers, Employees,
and Owners, supported by six strategic initiatives:
• Focus on Core Customers
• Improve Retail Profi tability
• Improve Merchandise Performance
• Retail Expansion
• Direct Channel Growth
• Growth of the Cabela’s CLUB Visa Program
Focus on Core Customers
Throughout 2010, we focused on our four customer
personas, developed in 2009 from our customer data,
which represent our core customers. Our merchants, retail
operators, and marketers use these personas as a fi lter to
ensure we make decisions biased to our core customers.
Looking forward, we will continue to deepen our focus on
our core customers and intend to roll out several initiatives
designed to further improve the customer experience and
maintain our industry leading customer service levels.
Examples of these initiatives include the formation of
a cross-functional Customer Experience Governance
Council to oversee, coordinate, and prioritize customer
experience improvement initiatives across the enterprise.
We are also rolling out our Legendary Impressions
program designed to deploy values-based training and
decision-making throughout the Company and organizing
customer champions to assist in creating and executing
improvement action plans. We have also introduced a new
“Voice of the Customer” survey for our customers which
will provide us with a more complete view of the customer
experience and allow us to compare ourselves with other
retailers. In addition to new metrics, in the second quarter,
we will implement an avenue for our Direct customers, as
well as non-purchasing customers, to provide feedback
through an online survey.
Improve Retail Profi tability
We have spent considerable time and effort improving
Retail profi tability over the past two years and realized
signifi cant improvement for the second year in a row. For
the year, Retail segment operating margin increased 290
basis points. I mentioned last year that we had nearly 100
ongoing initiatives in Retail operations to meet our goal of
a 150-250 basis point improvement in Retail profi tability
2012