Cabela's 2013 Annual Report Download - page 27

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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, Canada, 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.
We do not collect sales taxes in some jurisdictions, which could result in substantial tax liabilities and
cause our future Direct business sales to decrease.
An increasing number of states have considered or adopted laws that attempt to impose tax collection
obligations on out-of-state retailers. We believe 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. A successful
assertion by one or more states requiring us to collect taxes where we do not do so could result in substantial
tax liabilities, including for past sales, as well as penalties and interest. The imposition by state governments of
sales tax collection obligations on out-of-state direct marketers who participate in Internet commerce could also
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, which could have a material adverse impact
on our business and results of operations.
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
selling season. The extended lead times for many of our purchases may make it difficult for us to respond rapidly
to new or changing product trends or changes in prices. If we misjudge either the market for our merchandise or
our customers’ purchasing habits, our revenue may decline significantly and we may not have sufficient quantities
of merchandise to satisfy customer demand or we may be required to mark down excess inventory, either of which
would result in lower profit margins. In addition, as we implement our retail store expansion strategy, we will need
to construct additional distribution centers or expand the size of our existing distribution centers to support our
growing number of retail stores. If we are unable to find suitable locations for new distribution centers or to timely
integrate new or expanded distribution centers into our inventory control process, we may not be able to deliver
inventory to our retail stores in a timely manner, which could have a material adverse effect on the revenue and
cash flows of our Retail business.