Cabela's gets it right...

[Preacherman]

From the Wall Street Journal, 12/17/02 (http://online.wsj.com/article/0,,SB1...age%5Fone%5Fus):

Retailer Scores by Luring Men Who Hate to Shop

Cabela's Lavish Stores Draw Crowds of Outdoorsy Types

By KEVIN HELLIKER
Staff Reporter of THE WALL STREET JOURNAL


SIDNEY, Neb. -- As the largest retailer in this high-plains outpost, Cabela's Inc. sells the sort of products that people bought in the Old West: guns, tents, fishing lures and such. Cabela's serves the nation's oldest market -- the outdoorsman -- and its numbers are shrinking.

Yet Cabela's is one of the nation's hottest retailers. Its small but growing chain of stores is a formidable economic-development force, drawing gigantic crowds to tiny towns. And Cabela's accomplishes this by appealing to a most unlikely customer -- men who hate to shop.

"I'll do just about anything to avoid shopping," says John Brown, a small-business owner in Cheyenne, Wyo. In 35 years of marriage, his wife says she's persuaded him to go shopping only twice. Yet one day last month he invited her to drive 100 miles with him for a day of shopping at Cabela's. "I'm like a kid in a candy store here," he said, dropping a new tackle box into his cart.

Blockbusters

Cabela's operates only eight stores, but they are blockbusters. The Cabela's in Michigan is that state's largest tourist attraction, drawing six million people a year -- 35% as many visiting shoppers as all of New York City had in 2000. In Minnesota, Cabela's is the second-largest tourist attraction, trailing only the Mall of America.

This drawing power is all the more remarkable considering that Cabela's locates its stores in places such as Sidney. Before the store opened here in 1991, this agricultural town was so economically stricken that countless retailers had fled. Even Wal-Mart Stores Inc. had come no closer than a town 45 miles away.

Yet from the outset, the Cabela's here attracted more than 1.2 million visitors a year. To a town that had only 6,000 people, and that sits 150 miles from the nearest city (Denver), this rush of visitors seemed miraculous. Locals opened restaurants, hotels and dozens of other businesses to serve the visitors, eliminating Sidney's once-high unemployment rate. Today, the town boasts 200 more jobs than it has citizens, and the store is Nebraska's second-largest tourist attraction, behind the Omaha zoo.

"We call Cabela's the Big Green Stop Sign," says Sidney City Manager Gary Person, eating breakfast at a hotel that didn't exist before Cabela's. "The economic-development impact of Cabela's is off the charts."

Call it the reverse-Wal-Mart effect: Instead of stealing customers from nearby retailers, Cabela's bestows them. Its secret is a philosophy that would be heretical at Wal-Mart: Spend like mad on stores. The ceilings of its buildings are as high as at indoor stadiums and feature glass tops to let in natural light. Beneath the high ceilings are nature scenes: A mountain populated with stuffed bear, caribou and bighorn sheep. A waterfall spilling into a stream stocked with live trout.

As much as 45% of floor space is devoted not to selling but to hundreds of pieces of not-for-sale, museum-quality taxidermy. A stuffed polar bear alone can cost $10,000.

By selling branded clothing and other gifts that appeal to their customers' wives and children, Cabela's is also proving that rural shoppers desire more than a local discounter.

Little wonder that Cabela's has become one of the most wooed retailers in the nation. Towns are inviting Cabela's to their neighborhood at a rate of "double digits daily," says Tim Holland, Cabela's director of retail. Pointing at some boxes of potatoes piled high in his office, he says: "Those came from a town in Idaho."

Room to Grow

In the decade that ended in 2001, the number of U.S. hunters declined 7%, while the number of anglers stayed flat. Yet Cabela's faces no shortage of room to grow. The hunting-and-fishing market is tremendously underserved, as the popularity of Cabela's eight stores suggests. Hunters and anglers spent $70 billion last year, and yet there is no national chain of stores devoted just to serving them. By contrast, the $25 billion toy industry has given rise to Toys 'R' Us Inc., which had revenue last year of $11 billion. Moreover, the decline in hunters' numbers was offset by a 29% increase in expenditures. Outdoorsmen can be just as enthusiastic as children. "I hunt all autumn and winter, and I fish the rest of the year," says Scott Lyon, a construction superintendent from Wellington, Colo., who drove to Cabela's recently to purchase a new elk gun and a "varmint" rifle.

Cabela's has stores in only six states, and a map at company headquarters in Sidney shows red dots in the many states that Cabela's is considering entering. A person inside Cabela's says it is "highly confident" it can grow to between 25 and 30 stores, perhaps more.

Cabela's faces competition from, among others, a company so similar that the two could be twins. From its headquarters in Springfield, Mo., Bass Pro Shops is expanding a chain of hunting-and-fishing superstores that, like Cabela's, feature such diversions as big aquariums and mounted wildlife. Like Cabela's, some of its stores draw big crowds from a wide region. Its Springfield store ranks as one of the largest tourist attractions in Missouri, rivaling the Gateway Arch in St. Louis.

Unlike Cabela's, Bass Pro, with 16 stores and plans to reach 25 by the end of next year, operates in mostly urban markets. But both companies, realizing a showdown is inevitable, watch each other's every move. "They're like Pepsi and Coke -- they make each other better," says Stephen Murray, a Cabela's director and partner at J.P. Morgan Chase & Co.'s J.P. Morgan Partners unit, which owns nearly 20% of Cabela's.

For both of these retailers, a new push this year is to rev up marketing for Christmas. Unlike virtually the entire retail industry, hunting-and-fishing stores rack up most of their sales in spring, summer and fall -- fishing and hunting season. But this year, Bass Pro and Cabela's both launched new products -- woodsmen Santa dolls and the like -- and both are reporting strong sales. "We introduced our Christmas stuff too early, and it's selling out," Cabela's Mr. Holland said even before Thanksgiving.

Some retail observers question whether Cabela's or Bass Pro stores can be enormously profitable, considering how expensive they are to build, and how much space is devoted to entertainment. "The return on investment isn't what you'd want," says a retailer who claims to have seen the books at Cabela's.

Bass Pro executives decline to discuss results. At Cabela's, officials say without elaboration that their stores are highly profitable. Says David Roehr, vice president of marketing: "If they weren't profitable, we wouldn't keep building them."

Cabela's and Bass Pro have sales of barely $1.25 billion each -- representing only a few percentage points of the highly fractured market. As they grow, they're stealing market share from bait shops, independent sporting-goods retailers and general-merchandise discounters such as Wal-Mart.

Cabela's and Bass Pro compete on price with discounters, but they carry a selection that's six to 10 times deeper, especially in high-end goods. This is why Jason Gies of Laramie, Wyo., drove 150 miles recently to visit Cabela's. "I'd have to go to two or three different stores to find all the brands they have at Cabela's," says Mr. Gies, a 26-year-old mechanical engineer who bought a rare-model used Remington shotgun at Cabela's.

Yet deep selections of hunting-and-fishing goods don't explain the huge crowds showing up at these retailers, particularly Cabela's. Its wildlife displays are also a big draw, as are the quality of its gifts and clothing departments, which are aimed at women and children. Through this combination, Cabela's is accomplishing something other retailers have only dreamed about: It lures from long distances entire families who shop for hours.

The trick to doing this is appealing to the family member who is usually most reluctant to shop: Dad. One recent morning, Lara Miller was trying to round up her husband and three kids, as their morning trip to Cabela's stretched into afternoon. Mrs. Miller -- normally the only family member who likes to shop -- now was the one most ready to leave. "We haven't had breakfast yet," she moaned.

Her husband, Darren Miller, a farmer in Jerome, Idaho, said, "I love this place."

A man can enter Cabela's carrying a couple of rifles and expect a warm reception. The typical customer at Bass Pro and Cabela's is male -- and averse to crowds and shopping. The reclusiveness of the outdoorsman was one reason that both companies started as cataloguers, Cabela's in 1961, Bass Pro in 1972. When Cabela's opened its first big retail store here in 1991, it was purely for the purpose of showcasing its catalog goods. "We didn't expect the store to make any money," says President Jim Cabela, who with his brother, Chairman Dick Cabela, owns about 80% of the company.

(continued in next post)

[Preacherman]

continued from previous post

Museum-Quality Wildlife

The brothers didn't expect it to make money in part because they invested so much in the store. As the public face of their catalog business, it needed to be memorable, they thought. So they devoted a substantial percentage of its selling floor to museum-quality wildlife displays, spending tens of thousands of dollars on about 400 stuffed trophy kills. They installed four 8,000-gallon aquariums stocked with trophy-sized fresh-water fish.

They also vowed to offer first-class service, staffing each department with a generous number of employees who had to take 100-question tests on the products they sold. For customers who stopped by in the middle of a hunt, the store offered outdoor use of kennels and corrals for their dogs and horses to stretch out.

The store became an instant magnet for men such as Darell Roush and Gene Markin, friends and ranchers from Gillette, Wyo., 350 miles away. Whenever these two life-long haters of stores arrive at Cabela's, they become something unusual among men in these parts -- shopping buddies. They browse for hours among the product here -- scents, dog shoes, decoys, lures, lines, reels, boots, camouflage, boats, tents, ammunition and guns, rows and rows of them, new, used and antique.

Sometimes their children come along. Other times, such as one recent morning, a sense of guilt about having disappeared on a hunting trip had them shopping for the women in their lives, buying items Cabela's stocks for just that purpose. "I'm trying to get myself out of hot water," said Mr. Roush, 42, who spent $195 that morning on candles, candies and a decorative mirror for his girlfriend, and a new gun case for himself.

The expansion of the concept to other locales required Cabela's to create an executive position that is rare in the ranks of retailers: taxidermy purchasing specialist. That executive, Mark Dowse, must find as many as 800 stuffed animals per store, and mount them in scenes so authentic that even the droppings are real. The animals are displayed in action poses -- two grizzly bears locked in battle, two lions attacking a zebra, a leopard leaping through air toward a monkey. "The muscle tone of an animal, the eyes, the posture -- everything must be right," says Mr. Dowse.

The wildlife displays attract busloads of schoolchildren. But the product also appeals to more than men. Unlike other retailers that cater to men -- for instance, hardware stores -- Cabela's is also popular with their wives and children, in part because it has bolstered its lines of gifts and clothes. Cabela's has made a discovery that goes beyond the outdoors market: Contrary to the perception created by Wal-Mart's conquering of small-town America, rural shoppers care about more than price. Indeed, they will drive a long way to find ambiance, service and fashion.

So many retailers have abandoned rural America that in some towns Wal-Mart is the only source of clothing. This is why Liz Taylor, a Sidney employment consultant who doesn't believe in killing animals, is surrounded by killed and stuffed prey one evening in the aisles of Cabela's. At a time when seven-pocket khakis and other outdoor styles are popular in urban markets, the apparel section at Cabela's -- containing high-end brands such as Columbia -- is identical in appearance and price to the casual-wear sections of upscale department stores. "Cabela's is the only place around that has classy clothing," says Ms. Taylor.

Cabela's has made only one announcement about where it will build next: Hamburg, Pa. Other towns eager to attract the retailer might consider this advice from Mr. Person, Sidney's city manager: Profess a love of hunting.

"Personally I don't hunt," he says. "But in these parts you don't say that too loudly."

[BigG]

I went into the Cabelas store in Michigan and all I can say is "Wow." Everything you've heard is true. Imagine a Walmart superstore devoted to nothing but hunting and fishing. In addition to the gazillions of guns that line the walls and the used guns that are out in the aisles to be freely perused, there is a "Gun Room" that has all the African safari rifles you could shake a stick at. Just as impressive as all heck.

[Preacherman]

I've visited the Bass Pro Shop in Springfield, Missouri, and whilst the ambience was great, I was very disappointed in the prices. I reckon I could beat virtually all of the prices I saw by at least 25% by shopping around and/or ordering online. I hope Cabela's is better in this regard: certainly their catalog prices beat BPS by a significant margin quite often. Haven't yet been to a Cabela's store, but this article makes me want to go... any excuse for a shooting shopping spree!

[RCReecer]

BigG, I'm with you. I was on a trip to visit my sister in Michigan when I first saw it during construction. I was back the following year to check it out - simply amazing. I could (and did) spend all day there...

[BigG]

It's a mind boggler!

For example, in the used guns there were all kinds of Remington 8s and 81s and niche type firearms. You can pick em up, check em out, and buy em if you like em. The prices looked good to me. The Gun Room part had all kind of vintage guns too, a Winchester collecter would go nuts.

The taxidermy was museum quality as they said. Herds of deer with uncharacteristic racks. Gazillion point bucks. Unbelievable.

[bronco61]

I can see it now, The Packers win the Super Bowl and the reporter runs up to Brett Favre and asks:

"Brett Favre, now that you've won the Super Bowl, what are you going to do"?

Brett Favre: "I'm goin to Cabela's"!!

[ACP230]

I've been to the Cabela's in Owatonna, Minnesota and the one in Dundee, Michigan. They had Pres. Theodore Roosevelts' African elephant on display in Minnesota when the family and I were there. Also lots of massive whitetail bucks. We spent several hours in each store, had lunch in Minnesota and watched big trout cruise by in the wall tanks.

In Dundee I spent almost the whole time dickering on a Smith M58 in the Gun Library, so I'll have to go back some day and look at the rest of it.

Prices on clothing seem high IMO. Some guns are up there too, but there are bargains too and we found some at each store.

[AR-10]

As I post, I am eating some Turkey Jerky I bought at the Owatonna store.

I have been to that store six or eight times. I love going there. The selection is huge.

The ammo prices are not that great. Same with guns, scopes, safes, and most of the stuff I looked at closely. Still, it's fun to look. I always walk out with some ammo, even if it's not a huge bargain.

The jerky is priced right.

[444]

Very good article. I e-mailed it to three people.

[sjg26]

Let me preface this post stating that Cabela's is a good company and meets the needs of many sportsmen but.......
My town is the site of the next Cabelas superstore-----Hamburg, PA a quaint town(5,000 or so residents) in Berks County PA. The Cabelas store will open in Oct. 2003. I for one do not look forward to the projected 6 million annual visitors descending on the area. Granted - the jobs brought by Cabelas and the support businesses will benefit many residents, but the associated traffic, trash, noise and crime that inevitably follow anxious cash holding shoppers will also follow.

The tax incentives and deals granted by local officials is almost criminal in nature to the residents and small business owners, but I suppose that is the cost of progress.

[rbrowning]

SJG26,
If they build in Hamburg they way they did in Dundee, there won't be much problem with the masses invading your town. The Cabela's store is a destination store, people come to your town just to get to it. In Dundee the Cabelas is right next to the highway interchange. The town of Dundee is on the other side of the highway from the Cabelas. There were some new restaraunts and motels put in just for the travelers, but most of the trafic never goes into "downtown" Dundee.

Personal opinion, I have been to the Springfield BPS and theDundee Cabelas and there is a big difference. The caferteria in Cabelas serves lunches and snadwiches, not a sit down 4 star like the Rainforest restrauant in BPS. Cabela's prices seemed to be a little lower. Their different backgrounds was obvious with BPS featuring more fishing with some hunting and Cabelas featuring more hunting with some fishing. Either one will beat the heck out of any mall I've ever seen.

[bandaidman]

cabelas is really remarkable...they have some private label clothing that is worth owning...... great gun selection as well


bass pro is on the expensive side and their gun selection is mediocre. their fishing section is the only area i find that is worth visiting

[Redlg155]

I've been to the Bass Pro Shops in Springfield MO when we lived in Oklahoma and in Atlanta Ga when we moved down here to Florida. Both are nice places to visit and take the kids. I really liked the MO store. I didn't care too much about the prices, as I wasn't there to shop. I mostly came there to look at the place, much like a museum.

Hopefully I'll go to Cabellas someday.

Good Shooting
RED

[Sodbuster]

I've been to the Sydney store a number of times. Fantastic! I didn't know JP Morgan and Chase were in on the financing. A couple of shaky institutions right now that have over-invested in derivatives. Hope Cabela's does alright with those sharks.

[jmlv]

I feel a road trip is definately gonna be necessary on 2003! This I gotta see. Calelas here i come (of i'll wait till it opens<VBG>)

[Futo Inu]

Michigan/MN Cabela's better than MO Bass Pro? Exact same idea, different markets. Bass Pro also building a store here in OKC now.

[sjg26]

RBROWNING:

I'm not concerned with a "downtown invasion" - I advocate that very few people will actually come into town - the shops there would not appeal to the Cabela's clientele, much less their spouses.
The irony is that the business people expect all of the Cabela's masses - they are in for a surprise I'm sure. My oppostion comes from the 95% tax forgiveness given to Cabela's and the lack of proper infrastructure. Route 78/22 is bad when it has a minor hiccup with an auto/truck accident - the bypass runs right thru the middle of town.
Plus, there is a certain calming effect in tree-lined roads and hillsides - not gawdy billboards, rows of McD's and Residence Inn's and the like.

I am particulary cautious of the lack of planning for additional law enforcement - not because of the upstanding clientele (sportsmen and families like you and I and others here on TFL)but rather the potential criminal element attracted to the throngs of shoppers that will come to Cabela's to spend.
Hopefully it will work for the best.

[labgrade]

I've made the 3+ hour trip - Loveland, CO to Sidney, NB store a few times.

Always worth it to actually hold, feel, touch, put on the stuff they have - which is huge.

A very good friend works the firearms section - look up Robert Haven if you've the chance & tell 'im Al said "Hey."

You could buy a camo suit & cut it up the first day, burn it & still take it back a year later. Their returns are unequaled.

Best praise to date for Cabelas.

[Bob P]

I've been to the Owatonna store many times, I live about 15 miles from it and pass it each day on the way to work. You'd be amazed at the crowds there just before a hunting or fishing opening day. They also just opened up an outlet center next door in the old museum. It's the building with the three jets suspended out front - you have to see it to believe it. The outlet center has a somewhat traditional store in front, clothing, furniture, glassware, scopes, etc. The back is more like a warehouse store, items in cardboard boxes and
on steel shelving. They also have a taxidermist on site, and a free theater. The one thing slightly out of place is the restorers supply store where you can buy pieces to restore/replace old furniture or trim items.

Bob

[johnbt]

I don't need no stinking Cabelas store. I get THREE copies of each and every catalog. My last order was over a grand.

I don't even need a catalog to order anymore because I have it memorized.

A store? Should I just file for bankruptcy now?

John