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A Response to Bass Pro and Cabela’s Sale

October 12, 2016 - Larry Claypool
“Firearms and Fudge: Outdoor Stores Battle to be Your ‘Destination’”. That was the headline used in a feature article I wrote in the Summer 2014 issue of Ohio Valley Outdoors Magazine about super outdoor stores Cabela’s and Bass Pro Shops and smaller regional stores trying to keep up with the big dogs.

So much has changed in the past few years. Smaller ‘mini-Cabela’s’ regional outdoor stores have continued to pop up in the Ohio Valley region. And so have Cabela’s and Bass Pro Shops. Both giants have recently opened stores in Ohio. Cabela’s now has three locations in the Buckeye State. Bass Pro has two stores in Ohio with one more being planned.

Those plans may be scrapped after the October 3 announcement that Bass Pro Shops have purchased the Nebraska-based Cabela’s. *See story on Page 18. The two outdoor gear giants agreed to a $4.5 billion deal where the 99-store Bass Pro would snap up the 85-store Cabela’s, if the deal gets final approval.

How or why would a deal like this come up? And be allowed to be completed? A little competition never has hurt anyone!

It seems our finance gurus in this country have allowed people with deep pockets to get richer at another’s expense. Activist investor Paul Singer, of Elliott Management, put his nose into Cabela’s business because he saw a chance to score BIG because he felt the outdoor retailer was undervalued, and underperforming, and he could earn millions from his ‘hunch’.

Unfortunately for Cabela’s Singer’s hunch was correct. Elliott Management convinced others less than a year ago that they could force Cabela’s to sell, and profit.

Singer and Elliott Management have already cashed in. After his company purchased $233 million worth (11%) of Cabela’s stock at $38.50 in the last 10 months the hedge fund swiftly sold more than 3.3 million shares by mid-October for at least a $90 million profit. Experts say Elliott may unload the remainder of it’s three million stocks in Cabela’s and just ‘cash out’.

Some outdoor, and financial, experts say the $4.5 million price tag for Cabela’s was a steep price to pay since Cabela’s had been struggling for the past three years. The company has attributed the losses to decrease in demand for its clothing and footwear. Again, as I’ve stated before on these pages, the sale of firearms have helped Cabela’s and other retailers stay afloat.

So, what will this do to the many ‘mini-Cabela’s’ stores in this region? Will Fin, Feather and Fur, Great Lakes Outdoor Supply, Kames Sports, Kidron Sports Center, Woodbury Outfitters and Vance Outdoors respond? There’s also other chain stores, including: Dick’s, Dunham Sports, Gander Mountain, MC Sports and REI. Can they respond, or should they? And will this help prices for consumers?

A lot of questions, but we’re talking about sale of guns, ammo and hunting and fishing gear.

Do you have an opinion on the Bass Pro and Cabela’s sale? Will this change where you make your purchases in the future? Send me a note, via mail or email. My contact information is on Page 7. This column ran in the October 2016 edition of the Ohio Valley Outdoor Times.


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