Bass Pro teams up with an investment heavyweight in apparent attempt to purchase Cabela’s.
The rumors about Bass Pro Shops purchasing Cabela’s have been simmering for quite a while now, but it has been a few months since there’s been much news about the possible merger of these two outdoor retail giants.
Reuters is reporting however that the privately-held Bass Pro is now teaming up with investment banking company Goldman Sachs in an apparent attempt to make an offer for the purchase of the Sidney, Nebraska-based company.
Interestingly, even though Bass Pro has been one of the only names thrown around as a potential buyer for Cabela’s in many of the past reports, Reuters now reports there are buyout firms in competition with Bass Pro and Goldman.
But a partnership with Goldman will likely give Bass Pro the additional purchasing power they need to actually make a sale go through. Right now, a sale is rumored to still be in an early stage and nobody is commenting on a sale in progress.
Of course, even if nothing is for sure at the moment, the news still caused Cabela’s shares to rise. They closed at $52.51 last Tuesday.
One of the last pieces of news we heard about this potential outdoor retail mega-deal was when Cabela’s was rumored to be shopping their highly-successful credit card company separately before mulling a sale of the rest of the company back in January.
A sale of the credit card company hasn’t come either, but it was also during that time that Elliot Management Corp, which owns 11 percent of the company, was rumored to be planning a proxy fight to help speed along a sale of the company.
Cabela’s struggles have been well-documented for a while now. The company was forced to lay off 70 employees last September. During the rumors of the credit card company sale, sources to the New York Post cited inefficient inventory control and non-modernized operations as reasons the company has been less profitable to Bass Pro Shop in recent years.
Reuters noted big competition for outdoor product sales from online retailers like Amazon may also play a factor in a struggling sporting goods industry.
So what does all this mean for outdoor enthusiasts? It may be hard to say at this point. There are some consumers, like myself, where it may not mean much because they have shopped at and enjoyed both in the past. As I write this, my new Bass Pro-branded tent, purchased last fall, sits in its bag eagerly awaiting the summer camping season. Meanwhile, my tackle box is packed full with more than a few Cabela’s branded lures and baits.
But there are also people who are unquestionably and firmly embedded as fans of one company or the other. Who hasn’t heard a hotly-contested Cabela’s vs Bass Pro debate between outdoor enthusiasts? Will hardcore Cabela’s fans stay loyal if their favorite business is re-branded under the Bass Pro name?
Speaking of brand names, both Cabela’s and Bass Pro have their own brands of gear. If a sale goes through, it will be interesting to see what happens to Cabela’s numerous lines of name-branded products. It’s certainly hard to imagine a new owner willing to lose people loyal to the brand.
There’s also the matter of approximately 80 brick-and-mortar Cabela’s locations across the country. Here in Michigan, the massive 225,000 square feet location in the eastern part of the state put the tiny, unknown town of Dundee on the map when it opened.
Image via Wikimedia.
The Dundee location isn’t just an outdoor store but a popular tourist destination for Michigan with its massive aquarium and mountain display of mounted animals. It would be hard to imagine it being shut down or re-branded as a Bass Pro Shops. I imagine the same would be true at many other locations that Cabela’s has brought in jobs and helped put on the map.
Will we see the ultimate outdoor retail store hosting the best products and services the two companies have to offer all under a single roof? It’s probably too soon to tell, but this latest news has to at least make it a little more plausible!