Cabela's Expanding Next-Gen Stores

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Cabela's Expanding Next-Gen Stores

By Jamie Grill-Goodman - 05/02/2016
Outdoor gear retailer Cabela's, Inc. is expanding its retail footprint as it continues a number of strategic initiatives including information technology process improvement.

The company continues to enact its new Vision 2020 strategy, focused on creating intense loyalty for its outdoor brand through four key merchandise categories: hunting, fishing, camping and recreational shooting and providing better customer service. The strategy's initiatives include the expansion of drop ship programs, retail inventory visibility on cabelas.com, merchandise realignment in selected stores, and in-store customer service improvement.

In the second half of 2015, Cabela's launched a major multi-year corporate restructuring project. Through this project, the company identified several savings opportunities including information technology process improvement, indirect procurement, retail labor optimization, merchandise sourcing, retail support functions and supply chain enhancements.

In its first quarter for 2016, Cabela's total revenue increased 4.5% to $864.7 million, while revenue from retail store sales increased 7.6% to $564.1 million. However Internet and catalog sales decreased 10.2%.

With its pysical store strategy producing results, the company is opening new stores across the country, including two 70,000-square-foot, next-gen stores just announced for 2017: McDonough, Ga., and Lee’s Summit, Mo.

"They will be our new retail 3.0," said Cabela's President Scott Williams. "We will be able to take some of our savings that we gotten through our corporate-wide restructuring and to reduce the costs of opening those stores by up to $6 million. The amount that that flows through to an attractive ROIC is very exciting for us and makes us very confident about the growth out to 200 stores.

"And, as we look at kind of our generations of stores, our next-gen stores have continued to outperform legacy stores, our 70,000s in the future. We are excited about their progress."

The McDonough and Lee’s Summit stores' new design will offer customers an immersive outdoor environment including an archery and firearm tech room, indoor archery range and Bargain Cave, along with thousands of outdoor products displayed using Cabela’s brand new floor plan that dedicates more square footage of floor space to the company’s core areas in hunting, fishing, camping and recreational shooting. The new layout will allow the store to be more flexible with its product assortment, resulting in the store featuring more in-season products.

Cabela's opened five stores so far this year and will open one store in the second quarter in Abbotsford, British Columbia and two stores in the third quarter, in Avon, Ohio; and Ottawa, Canada, in Ontario. The company expects to build six stores in 2017, including the two previously mentioned.

"We've rolled out [the Vision 2020 strategy] in the third quarter of 2015, and see the potential to continue expanding market share in the outdoor industry, while growing organically through customer loyalty and by providing rich customer experiences in every channel," commented Thomas Millner, CEO & director