Bass Pro Shops recently cemented its status as the apex predator of outdoors retailing by acquiring competitor Cabela’s for an amazing $4.5 billion. That’s great for Bass Pro Shop, but I wonder what it means for the rest of us in the forest?
In some ways, this is yet another example of the challenges faced by traditional “big box” retailers in the internet age. Cabela’s put itself on the market as it struggled with falling sales. Customers spent 8.1% less on hunting, fishing and camping gear at Cabela’s in the first half of 2016 as compared to a year earlier. Much of those lost sales went to online retailers and smaller specialty outdoor shops.
Bass Pro Shops insists that Cabela’s will retain its identity and maintain its headquarters operation in Sidney, Nebraska. But as the wise man once said, we’ll see. The two companies have been mum about store closings or other operational efficiencies. But corporations don’t acquire major rivals unless they see a considerable upside that includes boosting efficiencies, which typically means the target company is eventually completely digested by the buyer.
Bass and Cabela’s are about the same size. There are 99 Bass Pro Shops with a total of 20,000 employees. Cabela’s has 85 locations and 19,700 workers. Cabela’s is most present in the Northwest while Bass Pro Shops are centered in the Southeast. The two go head-to-head in parts of Texas, Missouri and Kansas, which could raise antitrust concerns in those states.
As a consumer, I like this deal. While dominant companies do tend to raise their prices, that concern is outweighed by the continued existence of brick-and-mortar outdoors stores. The internet has great prices on hiking boots and kayaks, but the web can’t fit me for the right boot or talk me through the finer points of this kayak over that one. That expertise is unique to physical locations. And there’s nothing like a visit to a major outdoors store to tweak the family’s interest in a new adventure sport. (“Yes, that’s a crossbow. Please put it down.”)
Bass Pro Shops and Cabela’s hope to close their deal by early next year. Whether they move into the future together or continue to compete, I hope they are around for a long time.
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