Cabela’s Inc. (CAB - Analyst Report) announced the opening of two new stores, one each in Greenville, S.C.and Woodbury, Minn.These new offerings will furnish the residents of the above regions with an additional opportunity to own hunting, fishing, camping, and related outdoor merchandise.
The 85,000-square-foot Woodbury store is the company’s fourth in the region and is slated to open in fall 2014. The store would employ 185 full-time and part-time employees, while the 100,000-square-foot, Greenville store, which is slated to open in spring 2014, would employ 235 full-time, part-time, and seasonal employees.
The move reflects the company’s strategic initiative to expand in regions which provide ample growth opportunities, as the residents of the above areas are passionate about outdoor activities. Moreover, the company seeks to expand its store base to effectively penetrate into its target markets and generate healthy sales.
Cabela's is capitalizing on the under-penetrated markets through its new ‘Outpost’ store format, which is relatively smaller in size and requires less capital investment.
The company earlier announced that it plans to open 6 domestic next generation stores, 1 Canadian next generation store and 2 Outpost stores in fiscal 2013. Going forward, in fiscal 2014, the company plans to open 8 domestic next generation stores.
However, the outdoor recreation and casual apparel and footwear markets are highly fragmented and competitive. Cabela’s faces stiff competition from discount stores, such as Wal-Mart Stores Inc. (WMT - Analyst Report) and Target Corporation (TGT - Analyst Report), as well as from specialty retailers, such as GanderMountain, Bass Pro Shops, and Dick’s Sporting Goods.
These competitors have a strong network of stores, greater market presence and brand recognition, and financial resources. In comparison, Cabela’s currently operates through 40 retail stores across the United Statesand Canada.
Currently, we maintain a long-term Neutral rating on Cabela's. Moreover, the company holds a Zacks Rank #4 (Sell).