Cabela's Inc. - Company Profile, Information, Business Description, History, Background Information on Cabela's Inc.

One Cabela Drive
Sidney, Nebraska 69160

Company Perspectives:

The backbone of our business lies in our mail-order catalogs. Together, our Spring and Fall catalogs contain our entire line of 90,000 products. In addition, we mail sales and special merchandise catalogs throughout the year. Our customers worldwide know they can rely on our dedicated service and our 100% Satisfaction Guarantee every time. Order with confidence from Cabela's, the World's Foremost Outfitter.

History of Cabela's Inc.

A Midwest catalog and retail operator, Cabela's Inc. derives roughly 90 percent of its revenue from its mail-order business, selling fishing, camping, and hunting equipment, footwear, and apparel through its catalogs. Cabela's operated four retail stores that served as showcases for merchandise found in its catalogs. The stores were located in Kearney and Sidney, Nebraska, Prairie du Chien, Wisconsin, and Owatonna, Minnesota, the company's flagship store. During the late 1990s, the company produced nearly 60 million catalogs a year, mailing them to customers in the United States, Canada, and 120 foreign countries. Roughly 90 percent of Cabela's customers were male, generally between the ages of 35 and 60, residing in suburban and rural communities. Two brothers, Dick and Jim Cabela, owned the company.

Early 1960s Origins

Cabela's historical roots stretched back to quintessential, home-born beginnings. In 1961, Dick Cabela placed a classified advertisement in a Casper, Wyoming newspaper. He had purchased a collection of fishing flies at a furniture show in Chicago, taken the flies back to his home in Chappell, Nebraska, and thought placing a classified advertisement in a small newspaper would be the best way to make a profit from his modest investment. Cabela's advertisement read: "12 hand-tied flies for $1." Unwittingly, Cabela had taken the first step toward creating a half-billion-dollar business, a flourishing mail-order enterprise that would become known as Cabela's, but his intentions at the start were decidedly less ambitious. Orders from the Casper, Wyoming advertisement were filled by Dick and his wife Mary, who worked in their home in Chappell, seated around the kitchen table. As orders for the flies increased, Dick Cabela purchased other outdoor recreational items and mailed a mimeographed list of other products available. For the Cabelas, direct-mail marketing worked quick wonders. The couple's inventory grew rapidly as more and more customers placed orders from the mimeographed lists. By 1962, the growth of their inventory required the establishment of a warehouse. Although the kitchen table still served as the business office, there was now another component to the couple's operations--a small backyard shed that served as their warehouse.

During the first several years of their business, the Cabelas fueled greater demand by continually expanding their mimeographed list of products until it developed into a mimeographed catalogue of merchandise. As the business expanded, its growth created the need for the trappings of a conventional business, but the evolution of the business away from its kitchen-table roots occurred in measured steps. By the fall of 1962, the Cabelas realized their homebound business required greater support, both in terms of personnel and proper facilities. Initially, they had relied on temporary typists to help with catalogue preparation, mailing, and labeling; but not long after devoting their backyard shed to warehouse space, Dick and Mary Cabela knew their business required full-time attention and full-time employees. Dick Cabela convinced his younger brother Jim to join the enterprise in 1963, but neither Jim, Mary, nor Dick received any compensation during the first several years. All the profits were directed toward increasing mailing activities, purchasing a greater selection of merchandise, and paying for bigger facilities. In 1964, after three years of using a kitchen table as their primary office space, the Cabela brothers moved the company's operations into the basement of their father's furniture store in Chappell. By the following year, the business had grown large enough to warrant incorporation and another move to larger facilities. The business was moved across the street into a former U.S. Department of Agriculture building, and then two years later into the American Legion Hall in Chappell. At the Chappell Legion Hall, which housed the company's warehousing operations and its offices, a small retail display was showcased in the corner of one floor. Although a negligible contributor to the company's financial stature, the retail product display in the American Legion Hall was a precursor to Cabela's grandiose foray into the retail side of the business more than 20 years later.

One year after moving into the Chappell Legion Hall, the Cabela brothers packed up the business and moved again, venturing out of Chappell for the first time. A search for larger quarters had revealed a vacant John Deere building near downtown Sidney, Nebraska. The building, which comprised four stories and 50,000 square feet of space, had been donated to a local hospital as a tax write-off, but the hospital wanted to sell the building before it incurred property taxes. Because of the hospital's predicament, the Cabelas were able to acquire the building at a sharply reduced price, purchasing it in September 1968. The business was moved to the old John Deere building in 1969, and for the first time in its history, the Cabela enterprise occupied a facility that was larger than the company's needs. At first, only one floor--the first floor--of the building was used. Upstairs, above the warehousing, packing, shipping, and retail operations located on the first floor, Cabela employees used a portion of one floor as an archery range, but eventually the needs of the company required the space occupied by the archery range. Gradually, as the 1970s progressed, Cabela's moved up into the empty floors, ultimately occupying the entire building.

By the mid-1980s, more than a decade of steady growth had stretched the company to the physical limits of the building in Sidney, forcing the Cabela brothers to search again for facilities that could accommodate their business's growing needs. The need for more space sprang from the company's ever-growing mail-order operations. As it had from the start, Cabela's produced its catalog on its own, a rarity among direct-mail businesses. The company's employees performed all the work involved in producing the catalog, including the copywriting, typesetting, photography, and merchandising. Aside from the in-house catalog operations, the company also performed all its own warehousing, packing, and shipping duties, as well as staffing its own telemarketing operations, all of which required additional space. In 1986, the Cabela brothers fulfilled their need by acquiring a former Rockwell International plant in Kearney, Nebraska. Into this building, the Cabelas moved their telemarketing operations, which became a source of employment for the community's college students. With a steady supply of college students to operate the telephone lines, Cabela's ran its telemarketing operations 24 hours a day. The Kearney facility also became the home of Cabela's second retail store, a facet of the company's business that attracted nearly all of the attention directed at Cabela's during the 1990s.

Retail a Highlight During the 1990s

During the 1990s, Cabela's opened several new retail stores that managed to transcend the allure of even the most popular retail businesses to become something far more captivating. Cabela's retail stores, all situated in the Midwest, became tourist destinations, attracting weekend crowds that exceeded the population of the communities in which they were located. The stores were massive, intricately and abundantly outfitted with displays that reflected the company's outdoor sporting merchandise. Not surprisingly, when these stores opened to voluminous crowds, the business press focused their attention on the sprawling retail outlets, but at the heart of Cabela's was its mail-order business. Catalog sales propelled the company forward, not the revenue generated by its retail stores. The retail side of the company's business was developed to support the mail-order business, serving the same purpose during the 1990s as it had at its origin in 1967. The difference was in the scale of the company's retail efforts; the difference between a small retail display tucked in a corner of the Chappell Legion Hall in 1967 and the 75,000-square-foot to 150,000-square-foot stores that debuted during the 1990s. The leap in scale between these two eras was in proportion to the enormous growth of Cabela's catalog business, which had grown from a one-line classified advertisement into an operation that mailed millions of catalogs both domestically and abroad each year.

Despite the fact that Cabela's retail stores contributed a small percentage to the company's overall sales, the artistically designed stores were hard to ignore. The first retail store to epitomize Cabela's retail efforts during the 1990s was opened in July 1991, one year after work had begun on the new store. Located on the southern edge of Sidney, the store was situated on a 45-acre plot that included a 450-vehicle parking lot, with a separate lot for semi-trucks and recreational vehicles, a 3 1/2-acre pond, and a 16-foot tall, bronze sculpture of two bull elk in fighting pose. Inside the store, which measured 75,000 square feet, a 27-foot-tall replica mountain towered at the opposite end of the entryway, decorated with 40 game mounts of North American wildlife in a recreated habitat display. There were also four, 2,000-gallon aquariums stocked with trout, panfish, gamefish, and predator fish; a gun library, featuring a broad collection of firearms; and a travel center, where customers could plan trips to take them across the globe. The merchandise in the store mirrored the product mix found in the company's catalogs, with apparel taking up roughly 50 percent of the retail space, footwear accounting for 30 percent, and the rest of the floor and shelf space filled with hard goods, such as hunting, fishing, and camping equipment.

By all measures, the store was a resounding success, located on the outskirts of a community of 6,000 people, yet capable of attracting more than one million customers a year. Away from the grandeur of the Sidney store, however, the real work of the company was conducted in Kearney, where Cabela's "800 Service Center" was located. In two large rooms, 150 operators stood by the telephones 24 hours a day, seven days a week, receiving an average of two million calls a year during the early 1990s. During peak holiday periods, the 800 center's telephone staff doubled, occasionally taking as many as 35,000 telephone orders in a single 24-hour period. To house and ship the orders generated from the 800 center and to stock the retail stores in Sidney and Kearney, massive distribution centers were needed. At roughly the same time Cabela's was involved in designing and constructing its new Sidney store, the company acquired three buildings on the former Sioux Ordinance Depot grounds in Sidney for warehouse space. In 1992, another five buildings situated at the same location were acquired, making Cabela's warehouse space in Sidney equal to more than ten football fields. The company's distribution capabilities were further enhanced with the construction of a facility in Prairie du Chien, Wisconsin. The 600,000-square-foot distribution center in Prairie du Chien was completed in 1996, positioning the company to better serve its upper Midwestern customers.

Late 1990s Expansion

Physical expansion, both in terms of Cabela's retail business and in the number of facilities that supported its catalog operations, characterized the company's progress during the late 1990s. After more than 35 years of operating in Nebraska, the company had two retail stores in its home state, the massive warehouse in Sidney, its main telemarketing operation in Kearney, which was supported by an additional telemarketing operation in Grand Island, and a customer-service center in North Platte. During the late 1990s, the company's most notable activity took place outside the state of Nebraska, following up on its move into Wisconsin with the Prairie du Chien distribution facility. The one exception was the establishment of a new headquarters in Sidney in January 1998. The company moved out of its original Sidney headquarters building and into a new 120,000-square-foot, two-story building adjacent to the Sidney store. Meanwhile, as employees settled into their new offices in Sidney, the company was preparing for the opening of its largest retail store to date. The store, located in Owatonna, Minnesota, opened in April 1998, by far eclipsing the standard set by the Sidney store seven years earlier. The Owatonna store was twice the size of its Sidney counterpart, comprising 150,000 square feet of space. Half of the retail square footage was devoted to outdoor apparel, including 60 different patterns of camouflage, with the balance divided between footwear and hard goods, nearly identical to the product mix in the company's catalogs. The Owatonna store, a 45-minute drive south from Minneapolis, also contained the eye-catching features and habitat displays found in the Sidney store. Inside, the company built a 35-foot replica mountain, complete with running streams and waterfalls, two dioramas featuring African wildlife, a live-bait shop, a firearms and archery training center, and three aquariums with a combined capacity of 54,000 gallons. Outside the store, there was room for roughly 800 vehicles, including a parking lot for buses and semi-truck trailer rigs, as well as two two-acre ponds. Like the store in Sidney, the Owatonna store was an immediate success, attracting 120,000 customers during its grand opening weekend.

Despite the legions of customers drawn to the Owatonna store, overall retail sales only accounted for between nine and 12 percent of Cabela's total sales during the late 1990s. The balance was generated from catalog sales, which approached $500 million. The company mailed 28 editions of its catalog each year, sending nearly 60 million catalogs to customers in the United States, Canada, and 120 foreign countries. Looking ahead, Cabela's was intent on expanding its retail presence as a strategy to bolster catalog sales. The company was scouting five potential locations for retail stores in late 1998, anticipating its future stores to measure between 75,000 and 80,000 square feet. In October 1998, Cabela's opened its fourth retail store next to its distribution center in Prairie du Chien. A 40,000-square-foot store, the Prairie du Chien outlet was opened to meet the overflow of customers flocking to the flagship Owatonna store. With yet another successful catalog showcase added to its operations, Cabela's prepared for additional retail grand openings in the coming decade, its self-touted claim as the "World's Foremost Outfitter" held secure by a vast and flourishing mail-order business.

Additional Details

Further Reference

Brumback, Nancy, "Cabela's, the Mail Animal, Is Pushing the Retail Envelope," Daily News Record, July 27, 1998, p. 6."Cabela's Catalog Showroom Set for October Opening in Prairie du Chien, Wis.," PR Newswire, August 26, 1998, p. 8."Cabela's--Unending Progress and Growth Since 1961," Sidney, Neb.: Cabela's Inc., 1998, 7 p.Gribble, Roger A., "Cabela's Sporting-Goods Mail-Order Center Good News for Platteville, Wis.," Knight-Ridder/Tribune Business News, June 22, 1996, p. 6.Grier, Bob, "Cabela's: A Store with a Story," NEBRASKAland Magazine, August 1993, p. 8.McCartney, Jim, "Giant Sporting Goods Stores Opens 40 Miles from Minnesota's Twin Cities," Knight-Ridder/Tribune Business News, April 3, 1998, p. 4.

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