Cabela's 2013 Annual Report Download - page 14

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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 become one of the most well-known
outdoor recreation brands in the world, and 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 “Segment Reporting” of the Notes to Consolidated Financial
Statements and our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
for additional financial information regarding our Retail, Direct, and Financial Services businesses. Cabela’s
Incorporated and its wholly-owned subsidiaries are referred to herein as “Cabela’s,” “Company,” “we,” “our,”
or “us.”
Retail Business
At the end of 2013, we operated 50 retail stores, 46 stores in 26 states and four stores in Canada. During 2013,
we opened 10 retail stores, nine stores in the United States and one in Canada, and relocated a store in Canada. The
opening of these retail stores, and the expansion of the relocated store, increased our total retail square footage to
5.9 million square feet at the end of 2013, up 15% over 2012. Our Retail segment generated revenue of $2.2 billion
in 2013, representing 69.6% of total revenue combined from our Retail and Direct businesses.
Customer Relations. In order to better serve our customers, we continue focusing our efforts on offering
customers integrated opportunities to access and use our retail stores, web and social media channels, and catalogs.
Our omni-channel model employs the same merchandising team, distribution centers, customer database, and
infrastructure, which we continue to leverage by building on the strengths of each channel. Customer service
venues include in-store pick-up for website orders, in-store Cabela’s website kiosks, and catalog order desks. Our
in-store kiosks provide our customers access to our entire inventory assortment, allowing customers to place
orders for items that may be out of stock in our retail stores or to purchase items only available on our website.
Our in-store pick-up program allows customers to order products through our website and catalogs and have them
delivered to the retail store of their choice without incurring shipping costs, which increases foot traffic in our
stores. Conversely, our retail stores introduce customers to our website and catalog channels.
Retail Store Formats. Our retail store concept is designed to appeal to customers from a broad geographic
and demographic range. Our retail stores currently range in size from 40,000 to 246,000 square feet.
Our next-generation store format, with more standardized store sizes, expedites store development time and
allows us to pursue the best retail locations, is adaptable to more markets, improves time to market, and allows
us to be more efficient in our operations by reducing our capital investment requirements and increasing sales
per square foot. Our next-generation stores range in size from approximately 50,000 to 100,000 square feet. Our
next-generation store format improves our return on invested capital and better serves our customers by providing
shopper-friendly layouts with regionalized product mixes, concept shops, and new product displays and fixtures
with enhanced features. The exterior of our next-generation stores reflects our traditional store model.
We developed our Outpost store format to effectively serve smaller markets with a large concentration
of Cabela’s customers and to complement the success of our next-generation format. Our Outpost stores are
approximately 40,000 square feet in size and are designed to target market opportunities in smaller communities.
Our traditional, or legacy, large-format retail stores are 150,000 square feet or larger and offer a tourist-type
experience. These next-generation and legacy stores often attract the construction and development of hotels,
restaurants, and other retail establishments adjacent to these stores.