Cabela's 2013 Annual Report Download - page 4

New Store Performance
During the year, we opened 10 new format retail stores
in Columbus, Ohio; Grandville and Saginaw, Mich.;
Louisville, Ky.; Ashwaubenon, Wis.; Thornton and Lone
Tree, Colo.; Regina, Saskatchewan; Waco, Texas;
Kalispell, Mont.; and relocated our store in Winnipeg,
Manitoba, to a new site and increased its size. Each
of these stores is performing well, and the stores as
a group are significantly outperforming expectations.
In the highly competitive Denver market, we opened
two stores on the same day, roughly 30 miles apart, to
thousands of customers waiting in line. These two stores
have performed exceptionally well and further confirm
that our retail strategy of selecting new retail locations
based upon established and thriving retail centers with
strong co-tenancy provides tremendous success.
Our new format stores represented 22 of our 50-store
base at the end of 2013. As we prepare to open 14 new
retail locations in 2014, we could not be more excited
about our opportunity to service customers in great
new markets, including Augusta, Ga.; Greenville, S.C.;
Anchorage, Alaska; Christiana, Del.; Woodbury, Minn.;
Manning, Alberta; Missoula, Mont.; Lubbock, Texas; Barrie,
Ontario; Cheektowaga, N.Y.; Acworth, Ga.; Tualatin, Ore.;
Nanaimo, British Columbia; and Bowling Green, Ky.
Merchandise Margin and
Cabela’s Brand
Despite a headwind from a significant spike in demand
for lower margin firearms and ammunition, merchandise
gross margin improved in 2013 for the fourth consecutive
year. Margin improvement was due in part to our focus
on preseason planning, vendor collaboration, markdown
management, and the expansion of our Cabela’s
branded product offering. With an 800-1,200 basis point
merchandise gross margin advantage, we are focused
on expanding the penetration of Cabela’s brand within
our assortment. Our merchandising and sourcing teams
have continued the tradition of making Cabela’s brand
among the industry’s best. Technology and innovation are
key components that will drive the Cabela’s brand into
the future, and we have begun to realize the benefits of
both through many products we offer today. Our ZonzTM
camouflage pattern was among the most successful,
exceeding expectations in multiple metrics. Cabela’s
Northern Flight® waterfowl collection, OutfitHER®
women’s clothing line, and Regulator and Instigator bows
are just a few of many Cabela’s branded products that
performed exceptionally well during 2013.
The numerous awards and accolades received for our
outstanding products in 2013 are evidence our Outfitters
are truly passionate about the outdoors and providing
the highest quality products to our customers at a fair
price. We believe our brand has never been stronger,
and we are extremely excited for the 2014 lineup of new
product launches.
Cabela’s Club
Our Cabela’s CLUB® Visa program had yet another
exceptional year in 2013. Average active credit card
accounts grew by 9.9% to 1.7 million accounts. Average
balance per active credit card account grew 2.9%
and net charge-offs reached historically low levels,
finishing the year at 1.8%. This program continues to
develop strong bonds with customers, and in 2013,
we gave Cabela’s CLUB members $213 million in free
merchandise through our CLUB rewards program. We
are extremely excited for what the future holds for our
CLUB program, which will experience significant benefit
in account growth as we expand our retail footprint.
Investing in Our Future
During 2013, we took advantage of the outperformance
of our business in the first half to make meaningful
improvements to our business, which will significantly
benefit the long-term health of our company. These
investments include:
- It’s In Your Nature®
- Net SKU Profitability
- Price Optimization
- Omni-Channel Fulfillment
- Outfitter Mobility
- New Mobile Platform
- Digital Customer Experience and Marketing
(DCEM)