Cabela's 2014 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 2014, we operated 64 retail stores, 57 stores in 31 states and seven stores in Canada. During
2014, we opened 14 retail stores, 11 stores in the United States and three in Canada. The opening of these retail
stores increased our total retail square footage to 6.9 million square feet at the end of 2014, up 17% over 2013. Our
Retail segment generated revenue of $2.4 billion in 2014, representing 73.4% 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 without incurring shipping costs to the retail store of their choice, which increases foot traffic in our
stores. Conversely, our retail stores introduce customers to our website and catalog channels. We have added our
retail stores to our distribution network through the omni-channel fulfillment process, so customers who order
through our call centers or website are no longer solely dependent upon the stock we have in our distribution
centers. We now ship products to our customers from both our distribution centers and our retail stores.
Retail Store Formats. Our retail store concept is designed to appeal to customers from a broad geographic
and demographic range. Our retail stores range in size from 40,000 to 246,000 square feet.
Our new 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. These newer stores range in size from approximately 40,000 to 100,000 square feet. The flexibility in the
size of our new format store allows us to serve both large and small markets with large concentrations of Cabela’s
customers. Our new format for stores 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.
Our legacy stores refer to our large-format traditional retail stores that opened in August 2008 and earlier. We
have 28 traditional, or legacy, large-format retail stores, which offer a tourist-type experience. Our retail stores often
attract the construction and development of hotels, restaurants, and other retail establishments adjacent to these stores.