Cabela's 2012 Annual Report Download - page 15

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We have also developed a new “Outpost” store format due to the success of our next-generation stores. Our
new Outpost store format will be approximately 40,000 square feet in size and have a “core-flex” merchandise
strategy (selected core assortment of products and flexible seasonal merchandise). Our Outpost store format will
allow us to effectively serve smaller markets with a large concentration of Cabela’s customers and is in addition to
our next-generation format. We opened our first Outpost store on October 4, 2012, in Union Gap, Washington, with
results exceeding our expectations.
Retail Store Expansion Strategy. Enhancing our retail store efficiencies and taking the necessary steps
to improve our financial performance are high priorities in our strategic planning. We focus new-store growth
where we are strongest with new stores strategically sized to match their markets. We continually review our
previously announced stores to reconfirm our expectations based on what we have learned over the past year. The
next-generation stores generate more profit per square foot compared to the legacy store base and allow us to enter
additional markets. We opened six retail stores during 2012, compared to three in 2011, bringing our total retail
store square footage to 5.1 million square feet, an increase of 9.8% compared to the end of 2011.
We have also announced plans to open additional retail stores as follows:
• in 2013, seven next-generation stores located in Columbus, Ohio; Grandville, Michigan; Louisville,
Kentucky; Green Bay, Wisconsin; Thornton, Colorado; Lone Tree, Colorado; and Regina, Saskatchewan,
Canada; as well as two Outpost stores located in Saginaw, Michigan; and Waco, Texas; and
• in 2014, five next-generation stores located in Christiana, Delaware; Greenville, South Carolina;
Anchorage, Alaska; Woodbury, Minnesota; and Bristol, Virginia.
We will be relocating our existing 44,000 square foot Winnipeg, Manitoba, store in the second quarter of
2013 to a more desirable location and increasing the size to 70,000 square feet. We have also announced plans to
open an Outpost store in Kalispell, Montana, at a date yet to be determined. Looking to 2013, we expect to increase
retail square footage up to 13% over 2012, as well as generate an increase in profit per square foot compared to the
legacy store base, with the planned openings of these next-generation and Outpost stores.
Store Locations and Ownership. Of our 40 retail stores, we own 31, with two stores subject to ground
leases. However, in connection with some of the economic development packages received from state or local
governments where our stores are located, we have entered into agreements granting ownership of the taxidermy,
diorama, or other portions of our stores to these state and local governments. Refer to Item 2 – “Properties” for
additional information on our stores.
Direct Business
The Direct segment sells products through our e-commerce websites (Cabelas.com and Cabelas.ca) and direct
mail catalogs. Our Direct segment generated revenue of $931 million in 2012, representing 33.5% of total revenue
combined from our Retail and Direct businesses.
Direct Business Marketing. We market our products through our website and print catalog distributions.
We recognize that the catalog business is mature and that mobile marketing and social networking are having an
increasingly important focus for us. With new technologies, we believe mobile marketing and social networking
will build our brand, build our customer databases, and enhance the management of contacts with our customers.
Our website is a cost-effective medium designed to offer a convenient, highly visual, user-friendly, and secure
online shopping option for new and existing customers. In addition to the ability to order the same products
available in our catalogs, our website gives customers the ability to review product information, purchase gift
certificates, research general information on the outdoor lifestyle and outdoor activities, purchase rare and highly
specialized merchandise, and choose from other services we provide.
Our digital transformation continues with efforts around enhancing our Internet website to support the
Direct business. Cabelas.com continues to be the most visited website in the sporting goods industry according
to Hitwise, Inc., an online measurement company. The amount of traffic now coming through mobile devices is