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Cabela’s Inc. (CAB - Analyst Report) unveiled its plan to open a next generation store in Green Bay, Wisconsin. The new store will provide the residents of the region an additional avenue to own hunting, fishing, camping and related outdoor merchandise.
The new store, which is slated to open in the summer of 2013, will be the company’s third store in the region and would employ 175 employees, including full-time, part-time and seasonal employees.
The region provides ample opportunities for the company to drive top-line growth, as the residents of the area are passionate about outdoor activities. Supporting the view is the performance of the company’s present stores, which are generating healthy sales.
More than ever before, retailers have turned focus on buyers’ needs to create growth opportunities that could augment sales in the long run. Cabela’s came up with its new ‘Outpost’ store format. The relatively smaller-size store will facilitate the company to capitalize on the under-penetrated markets.
Last quarter, the company opened two next-generation stores, one each in Wichita, Kansas and Tulalip, Washington. Moreover, the company also announced its plans to open two stores in Denver in fiscal 2013.
However, the outdoor recreation and casual apparel and footwear markets are highly fragmented and competitive. One of the company’s peers, Target Corporation (TGT - Analyst Report), recently unveiled its plan to open a CityTarget store at the Beverly Connection in Los Angeles, California.
In order to tap the urban markets, where real estate remains a constraint, Target introduced CityTarget stores. As per the company, the new stores will vary in size from 60,000 to 100,000 square feet compared with its typical format of 125,000–180,000 square feet.
Despite competition, Cabela’s next-generation store format, multi-channel strategy and seasonal product assortments enable it to focus on increasing store productivity and sales per square foot while lowering its labor costs.
Currently, we maintain a long-term Outperform rating on Cabela's. Moreover, the company holds a Zacks #1 Rank, which translates into a short-term Strong Buy recommendation.
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