Cabela's 2013 Annual Report Download - page 42

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the end of 2013 was 5.9 million square feet, an increase of 15% compared to the end of 2012. In May 2013, we
relocated our former 44,000 square foot Winnipeg, Manitoba, retail store and opened a new 70,000 square foot
next-generation store.
In 2014, we currently have plans to open new retail stores located as follows:
• next-generation stores in Christiana, Delaware; Greenville, South Carolina; Anchorage, Alaska;
Woodbury, Minnesota; Tualatin, Oregon; Cheektowaga, New York; Acworth, Georgia; Edmonton,
Alberta, Canada; Barrie, Ontario, Canada; and Nanaimo, British Columbia, Canada; and
• Outpost stores in Lubbock, Texas; Missoula, Montana; Augusta, Georgia; and Bowling Green, Kentucky.
For 2015 and thereafter, we currently have plans to open new retail stores located as follows:
• next-generation stores in Berlin, Massachusetts; Sun Prairie, Wisconsin; Garner, North Carolina;
Fort Mill, South Carolina; Bristol, Virginia; Moncton, New Brunswick, Canada; Ammon, Idaho; Fort
Oglethorpe, Georgia; and Short Pump, Virginia.
We plan to open 13 to 15 retail stores each year. The retail stores planned for 2014 represent approximately
one million new square feet of retail space or 17% square footage growth over 2013. It is expected that the planned
openings of these next-generation and Outpost stores will continue to generate an increase in profit per square foot
compared to the legacy store base.
We are focusing on improving our customers’ digital shopping experiences on Cabelas.com and via mobile
devices. Our marketing focus continues to be on developing a seamless omni-channel experience for our customers
regardless of their transaction channel. Our digital transformation continues with efforts around enhancing
our website to support the Direct business. The amount of traffic coming through mobile devices is growing
significantly. As a result, we continue to utilize best-in-class technology to improve our customers’ digital shopping
experiences and build on the advances we have made to capitalize on the variety of ways customers are shopping
at Cabela’s today. We have seen early successes in our social marketing initiatives and now have over 2.9 million
fans on Facebook. Our omni-channel marketing efforts are resulting in increases in new customers, as well as in
customer engagement with a consistent experience across all channels. Our goal is to create a digital presence that
mirrors our customers’ in-store shopping experience.
Continuing in 2013, we realized improvements in our website traffic, growth in multi-channel customers, and
very early progress in our print-to-digital transformation. We have developed a multi-year approach to reverse the
downward trend in our Direct segment and transform our legacy catalog business into an omni-channel enterprise
supporting transformation to digital, e-commerce, and mobile while optimizing the customer experience with our
growing retail footprint. We are in the very early stages of this effort. Near term efforts have been focusing on our
print-to-digital transformation and testing targeted shipping offers. Also in January 2013, we opened an office in
Westminster, Colorado, to attract high-quality talent to improve our website, social media, and mobile applications.
Comparing Direct segment results for 2013 to 2012:
• revenue increased $43 million, or 4.6%,
• operating income increased $2 million to $157 million, and
• operating income as a percentage of Direct segment revenue decreased 60 basis points to 16.1%.
The growth in Direct revenue was due to an increase in the hunting equipment product category. This growth
was impacted beginning in the third quarter of 2013 by a significant deceleration in ammunition sales compared to
2012 and a more cautious consumer. During the fourth quarter of 2013, we launched our new mobile website and
our omni-channel fulfillment program.