Sad Story of Cabela's/Bass Pro Merger
General Topic
My only questions are....why did Cabela's sell such a big piece of the pie to Elliott knowing Singer's reputation? And how does 11% ownership give you enough power to force a merger?
11% could have been a majority.
There are stories like this every day across America. These hedge funds/ investors don’t give a damn about the people that get rolled in the process all in the name of making quick millions. Can you say Romney? Bloomberg? Not sure what the answer is. I suppose that they do have some positives, but they seem to have far more negatives.
"how does 11% ownership give you enough power to force a merger?"
Such funds buy big stakes in companies and then throw their weight around to force changes. They persuade other big investors to go along with their demands because the payoff can be big. If they don't get their way, Elliott Management conducts "proxy fights" to gain control and get board directors elected that will go their way
It is used to be called a hostile takeover, not sure now with the PC crowd. Almost overnight Cabela's was gone, just a corporate shell. Very sad.
I seen this story last night too. Some of the commenters at the article made some good counterpoints.....Cabelas should not have gone public, they over-reached trying to grow the company, Tom Steyer does the same thing and such. One thought I had is how much money did the Cabelas employees in Sydney make off the stock?
The company I work for is owned by an investment group and we just merged with two other companies that were once our direct competition within the industry (pipe cutting/beveling machines). The powers that be are being a bit quiet about possible moves. I feel at some point they will merge the two domestic facilities together and it will be moved somewhere between Tulsa and Houston. Most likely IN Houston. At that point, I'll be out of a job because Houston isn't home. Gotta have concessions made and ducks in a row... just sad that I've invested almost 13 years of my life and POOF, could be gone. Time will tell.
I saw this last night in the news. It's sad for the Sidney economy. I remember back in the day it was the place to go. I'm sure the two guys who started Cabela's are turning over in thier graves.
"A man with a briefcase can steal more than 100 with guns and masks."......Don Corleone
This was true back then and even truer now.
Embry, I worked through a merger as well. The first phase went in my favor as they closed down a union plant in Wisconsin and moved all the work to our plant in Iowa. A few years later, they closed our plant and moved all the work to a couple different facilities. I had the opportunity to move to Kansas but declined. They offered a severance package if I stayed through the move but I couldn't stand being there anymore and took another job right away. The Kansas plant has since closed, too.
That Iowa facility was brand new and full of brand new equipment. Within 6 years, it was closed and sold. Simply amazing to me.
For the last 16 years, I've worked for a private, family owned business and couldn't be happier. They've been in business for over 50 years and have grown to the largest employer in the county. The original owner has passed and his son took over and soon, his son will take over. They have done very well and have actually built something to be proud of.
I don't know how guys like Singer can sleep at night.
So did they shut the Sidney store down completely? The article didn’t come right out and say that. I was just in there last month.
Times are definitely changing, I wonder how Cabela’s / bass pro is actually doing overall. I don’t shop there any more and most others I know don’t either.
Embry: Your gut feeling is likely right on point. When one door closes another opens. Be on the lookout for what that may be!
The way the economy is going now (Amazon) I doubt two companies could survive doing the same exact thing so how it became one was not if but when.
A very sad outcome for a great company. I stop at the Sidney store a couple times this year. It was not the same store that I remember. Talked to a couple of the old Cabela’s employees and they said it wouldn’t be a surprise if the store closes next year. Possibly the worst selection I’ve seen. Makes me wonder how long the Cabela’s in St Louis will stay open with a BP in St Charles.
Sad is an understatement. I remember just a few years ago for Christmas the only thing I wanted was Cabelas gift cards. Now i don't even have their credit card. The last time I was in Cabelas in Wheeling WV I noticed they were more in the business of selling floor space and mounts than actual merchandise. Had to go as far as to ask someone where they moved the hunting clothes, which used to be the first thing you saw when you walked in the door, now its where the Bargain Cave USED TO BE. I've also noticed since the merger the majority of their products are high end merchandise like SITKA,NORTHFACE,COLUMBIA just to name a few. Before long it will be the demise of a another big box retailer.
If a vulture like Elliot is flying about the sky in your company you better have a back up plan or seriously start thinking about it. They don’t get involved in companies with robust growth. They prey on the weak plan and simple.
Elliot took a 1% stake in the company I work for and started making all kinds of demands. They started a media shit storm and are now almost completely in control. We had 282,000 employees when they took their position. Now down to 252,000 and we were recently told they are cutting 4% more with a reduction in benefits including our pensions. All at the hands of Elliot. All for a 1% stake? Now they have two board positions and are showing the current CEO the door so they can have their yes man in place.
I worked at the same place for 37 years and went through two mergers. I had a great job but was on call 24/7. I liked my job and could have stayed but I retired when I was 55 years old. I couldn't get my retirement until I turned 62 but made out fine. Since I left the plants where I worked have been torn down. I don't miss getting calls in the middle of the night to be on a plane to George, Kansas, Canada or Mexico the next day. I remember my secretary giving me 18 plane tickets at one time. I was on a first name basis with some check in people at several air ports. The only flying I do now is when my son comes to visit in his small plane.
There is tremendous pressure from online retailers such as Amazon. Most I know get much of their sporting goods there now. Financial pressure such as this leads to consolidation, and worse. I am sure there are other factors too, a changing landscape for sure.
My dad used to take me elk hunting in Colorado when I was a teenager. The second-best part of that trip was always a stop at Cabela's in Sidney. It was one of a kind back then. Makes me sad to hear that it's now history.
Cabelas is still there although it is AKA Bass Pro, it certainly is not the old Cabelas there is no "Bargain Cave" which us cheap ass bow hunters went directly to. They do not stock anywhere near what they used to. It feels like they are just waiting it out...waiting what out? i'm not sure...just feels that way. And like Bass Pro it has turned to mostly clothing. But lots of big nice homes for sale cheap!
Amazon is on its way down and they know it. It was successfully climbing as long as buyers did not have to pay taxes and shipping. Now I can buy the same items at equal prices or sometimes less, no shipping because it is local, and I still have to pay the tax. If you do research most times Amazon is overpriced compared with smaller online retailers that do not charge for shipping and collect no tax.
Amazon may of course go down, in the meantime they are raising havoc with many businesses. Shoppers enjoy their convenience.
I don't shop at Cabelas or Bass Pro anymore. Amazon is too damn easy. But I try to buy from Midway USA. Private Missouri company, and I like to support them if possible
Would cabelas even be still open if it hadn't gone public? They had been going down for years. As bad as the article is about sidney I can't help but think they would have been in the same boat either way.
The nearest Cabela’s to me is Wheeling. But a few trips there after the merger and it was just obvious it wasn’t really Cabela’s anymore. They recently opened a Sportsmans Warehouse a bit closer in Washington Pa so that’ll be my go to. Always liked the one in Missoula and more than happy to boycott Elliot and Bass Pro.
I sure was disappointed to see the Bargain Cave filled with racks of “discount” clothes. A quick glimpse and I could see there was no Sitka or Kuiu in there! Lol
I cant even remember the last time I went online to the Cabelas/Ass Pro site
Typical self-serving greed. Nothing more and nothing less.
This IS NOT Capitalism...
I will second Midway USA, I enjoy their service.
Cabela's price matched some boot insulators a week ago for me so at least there is still a pulse.
Nick, I'd really like to move to a company that is family/locally owned, it is my goal going forward. I've got a lot of knowledge in manufacturing and know many people in machining and the pipe cutting business. Also, I don't think I'll wait around and show the new guys all I know. Hope this doesn't effect the trip to Kodiak. :)
Charlie... you are correct, and I'll have things in place. That's a given!
Maybe Iowa is the next open door, Rick! ;-)
"This IS NOT Capitalism."
What happened may not be popular or pretty but the alternative to Capitalism is the govt coming in to the private sector and picking winners and losers. If you want to legally buy or invest in another publicly traded sporting goods company like Dicks, should the govt have control or input over that? IMO...no.
Just like Gander Mountain in Fargo Couldn’t compete with Scheels shut down. But Scheels is hard to compete with They hire very professional people have a great bow shop with a lot of knowledgeable people. And they stand beside all of their warranty’s Gander on the other hand had a bunch of dip sh.... running it. Scheels very hard to beat.
Singer with his reputation merely mentioned that Cabelas should consider a buyout, that opened the floodgates and the markets reacted. He pushed the snowball off the cliff and walked away with close to a $100 million.
Never cared for bass pro and I’m done with cabelas. Sick of going to thier stores of half empty shelves and nothing available and no one around to help you. Black Friday sales this year were 5 year old junk they were looking to dump. Got rid of thier credit card after 10 years. I have a scheels closer to me, has high end gear that’s in stock and thier sales they run are great. Will take my business thier from now on. Too bad
hmmm, Cabela's went public, Singer's company swooped in and forced decisions.... Seems to me the problem was when they went public, what a shame.
I don't know the family involvement in the business, but why did they choose to go public? Dick had a pile of kids and huge family, and how about Jim?
I knew that once they went public it was over, and after the announcement that Bass Pro purchased that was the stake in Dick Cabelas coffin, too bad.
Isn’t Johnny Morris the wealthiest guy in Missouri? I doubt BP/Cabela’s goes anywhere soon
Singer and Mercer own half the party. The wilkes brothers own the other half. Why is anyone surprised at any of this ?
I'm about 50-odd miles from the Cabelas stores in Hartford CT and Berlin M A, a bit further from the BassPro in Foxborough MA. I'm frankly surprised that the two stores in MA have both remained open to date. I guess all three just do enough business to stay open.
The big Sidney store is still open but most of the employees worked in the corporate offices, which are now virtually all empty.
As far as why they went public, my understanding is that senior management wanted to expand the retail presence nationwide and the only way to raise that kind of expansion capital is by going public, or borrowing from a BDC at a high interest rate. In retrospect, the ambitious expansion diluted the brand and ended up wrecking the company. Sort of a bad decision in light of the demise of retail stores to big online sources like Amazon. They could have been the Amazon of outdoor gear with a different strategy. Hindsight...
I spent a lot of money at Cabelas. Had their black Visa card. They “were at one time a great company” for us outdoors people. Unfortunately, they grew too fast, to big, with no succession plan for when the brothers passed. Bottom line, their demise is Cabelas fault.
FACT: mergers and acquisitions are a part of daily business, just more prevalent in big business. If they worry you, you either need to be self employed or work for a privately owned company. Even then, nothing is guaranteed because as the saying goes, "everything is for sale for the right price". Whether you admit it on a public forum or not, I'm guessing anyone in the same situation would sell out to make tens of millions of dollars, especially a company that was headed in the wrong direction for many years.
Cabelas had a great run and served us well. When founders age and pass, oftentimes objectives change. This is nothing peculiar to Cabelas. I am glad they served the outdoor community for so many years. Things change, and so did my purchase habits.
Lou, maybe Hooter's is next. If so, what will become of the January gathering?????? My guess, your mountain house! Paul
Just to clarify, only one of the original brothers passed.
Sad to see Cabelas change. A lot if their branded gear and clothing was a good stuff for the price.
Like many over 40, before we had the internet we spent a lot of time surfing the Cabelas catalogs and going to Sidney was a treat.
Mertyman... truth in all you said.
It takes a lot more than 1 greedy guy to make all this happen. There is plenty of greed to go around. Those involved weren’t “forced” to sell, the deal was sweet enough for them personally and they sold. I don’t like it anymore than anyone else but that’s the way it goes.
Mertyman has it. I worked for a company that had the 4th best stock performance of the decade of the 90s. True Wall Street darling with amazingly rapid growth and a near worldwide monopoly on their technology. Revenue was doubling annually. We had secretaries driving Ferraris, built a huge shiny new corporate campus.
Then the founders retired, the new leadership made a bunch of of bad acquisitions in attempts to grow the company beyond their core competencies, and by 2014 the company had been purchased by VCs, dissolved, and ceased to exist.
That's the nature of business in a free market economy. We have the ability succeed or fail beyond our wildest dreams. Sometimes both.
A guy I know in Loveland recently sold 70 acres of hayground with water in Berthoud for 1.3M, and bought a big ranch in Sydney with his proceeds. Sounds like all us Colorado boys should start shopping for real estate in the Sydney area. Timing is everything, timing sounds good to buy up there.
That said, sorry to hear about the hardships of the locals. Bankruptcy is sure possible for any of us, you never know if your plan is going to work or not until it doesn't.
I think the point everyone is forgetting here is that when the Cabela's family decided to cash in on their success they ultimately were to blame for the companies demise! Anyone with any know how knows that once you take a company public and sell shares on the open market you are setting yourself or in this case the company up for what ultimately happens, a buyout! When the family went public the brand, logo and it's people were doomed! Want to lay blame lay it where it belongs! my 2 cents
How long does one expect the owners to work?
If you don’t like change you are going
To like irrelevance a heck of a lot more
Martyman X 2. It is a part of life in big business. And, it is driven by capitalism. The thing everyone must remember is no one was complaining when merger rumors sent stock prices up. Why individuals didn't cash out when the getting got good is beyond me. People seem to get confused with the way investment wealth works. And, act as if it is a surprise when that wealth gets erased in the blink of an eye.
I don't blame anyone but the stock holders that kept watching their "money" grow like some kind of magic was applied. I hate to see people loose their stuff but, free markets and the freedom to invest as you see fit requires some individual responsibility.
Capitalism just means you have the ability to own your business and/or enjoy the profits of it and not the gov't, the opposite to state socialism and it's evil twin communism.
Free market society (economy) just means you have the ability to choose through simple free competition - anyone who wants to can make a go at it.
A super rich guy coming in, buying up shares in a company, then strong-arming for a sale or merger is not free competition (so not a free market). There was no choice by consumers which is what allows for the ability to choose between providers of the product. The decision is made for everyone that you will accept this product because we say so. Sorry, no free market there.
The only free market involved here would be the ability to choose between Barlow's Tackle Supply, Fish USA, Midway USA, and Cheaper Than Dirt against Cabelas'/BassPro.
Don't confuse the greed of one over what an economic system really is...
It was the desire of money that drove EVERY single variable involved in this merger. From the ones who profited to the ones who lost. It wasn't a bastardization of capitalism or free markets that caused this. It was the results of the drive for more. People had choices all along that resulted in this outcome. From the original owners down to consumer interest in the brand that inspired the notion that going public was a good idea. No one had a gun held to their head to start the business, shop at the business, invest in the business, or to sell or keep their interest in the business. Everyone made their choice. Those choices resulted in better outcomes for some then others. That is the definition of a free market and capitalism. The horse always comes before the cart. Not the other way around.
HDE, you're oversimplifying and confusing the two concepts by creating a false division. "Greed" is the catch-all phrase whenever someone makes a profit, but the other tens of thousands of shareholders weren't forced to sell. They voted to sell. I sold my stock before the sale. If you are invested in any venture and have no emotional attachment, and have the opportunity to double your investment, well, that is the point of investing. You vote to sell. Pension funds for tens of thousands of working class Americans and many with 401K and IRA funds invested in Cabelas also profited from this sale. Thats not "greed". An old lady making money in her IRA on a stock sale profit isnt "greed". No one forced anyone to invest in Cabelas. Nobody cried when they made a big profit on the investment. Thats how the free market works, as opposed to the government stepping in and stopping the sale for the simple purpose of preventing free-will shareholders from profiting off an investment.
Meanwhile the workers/employees head to the unemployment lines, real wages and buying power is reduced, job benefits and retirements are lost after these investors get done playing their games. Yet they still want employees and customers to be loyal. Unrestricted wealth grows unrestricted greed at an astonishing rate.
When I read stories like this it makes me appreciate my company, USPS. Because creeps like this will never be able to touch us. Too big a fish to fry.
Who wouldn't like a quasi-government agency with zero accountability and would have been bankrupt years ago without government infused cash. They've lost $69B since 2007 and are currently something like $12B in debt. And while the USPS doesn't receive tax dollars for operating expenses, the government is only one willing to "loan" them money, which they continually default on paying back. So yeah, the taxpayer DOES subsidize the USPS. And if Amazon's private delivery service takes off, there goes another chunk of revenue.
I hate the word "greed" because you can't define it. Heartless and soulless comes to mind, tho.
Jaquomo has the correct perspective, excellent post.
This whole thing reminds me of the Movie Wallstreet. Anybody remember it?
Agree with Jaquomo. However, Basspro is the Walmart of the sporting goods industry, just not in every neighborhood, thank goodness. If you care about independent businesses then be a customer of them.
it's not my obligation to subsidize local businesses at a premium......... it is their responsibility to earn my business and compete in a way that provides needed value I can't get other places.
"Jaquomo has the correct perspective, excellent post."
Not really. The concept and practice of capitalism is what gives rise to, in this case, "vulture capitalism". Capitalism and a free market economy is an economic system, not a business practice. It allows a merger and aggressive take-over to occur.
Jaq, no, I am not oversimplifying it or confusing anything and making a false division. Maybe you should understand the statement I made first before pontificating about it. I full well know how business works, and full well know why you invest, and full well know why a publicly traded firm offers shares in its firm for sale, but do not confuse business practices terminology with economic system terminology. Mergers and take-overs exist in economoc systems as well that are not capitalist economic systems.
I imagine most would agree with you as well if you said the sky was bright pink...
Highby Outdoors is a new store in Sydney. I believe it's a bunch of Cabela's employee's started it. Pricing is pretty good, bought a scope that was on sale.
Does highby have a storefront in Sidney or is it just online?
I don't like what Singer's hedge fund did, especially the consequences to the good folks in Sidney. But unless we adopt a Warrenesque economic system where government overreach prevents investors from assuming more than a certain percentage of ownership in a company, it will continue. Nobody needs dumbasses in government screwing up our system and picking winners and losers any more than they already do.
In this deal, the real losers were the 2000 employees in Cabelas corporate. They sucks for them and for the ancillary businesses in Sidney. The winners were the tens of thousands of investors who all benefited from this merger. Residual losers were those of us who enjoyed Cabelas products, who are now free to help pick the next winners and losers through our buying choices.
HDE, what would you change?
"I imagine most would agree with you as well if you said the sky was bright pink..."
It was bright pink when the sun came up this morning, weird, you need to jump up to Econ 201 if you're goin to argue with Lou on this...
Agree with mertyman, WVM, and Jaq. There are winners and losers in these deals and, despite what Tucker said, this has been happening for eons. While some of the transactional aspects of these deals may have changed over the years the goals and objectives, by and large, haven't -- and neither have the range of outcomes which often includes people holding the short end of the stick.
Thank goodness for Wall Street. Love it or hate it, it's the engine that keeps this country (and the world) running more smoothly than any other entity. Gordon Gecko was right.
Cabelas is changing fast. People with the means and knowledge know that and could make a play to fill the space its creating in the market.
Is it viable and desirable enough to consumers to be worth the effort, investment and risk? That's the big question
I don't think it was as much the pricing of Cabelas it is that BPS sucks,they want to sell fishing poles,cloths and toys and now have ruined Cabelas ,even their credit card sucks now
Cabelas was sliding before they got gobbled up.
They would have gone under all by themselves regardless.
They should count their blessings they have some big evil corporate raiders to blame it on.
The Free market and capitalism don’t guarantee protection from ruthless people that will do whatever it takes to advance their financial positions. I do know this - more government regulation is not the answer.
That’s the foolishness of it all. People get wrapped around the axle because of something like this happening in the free market (capitalism) so their answer is more government regulation. Because we know we can trust the government - you know, there are no ruthless, unethical money grabbers there... the slippery slope to socialism.
"Who wouldn't like a quasi-government agency with zero accountability and would have been bankrupt years ago without government infused cash. They've lost $69B since 2007 and are currently something like $12B in debt. And while the USPS doesn't receive tax dollars for operating expenses, the government is only one willing to "loan" them money, which they continually default on paying back. So yeah, the taxpayer DOES subsidize the USPS. And if Amazon's private delivery service takes off, there goes another chunk of revenue."
Although I am not an employee of USPS, I've picked up quite a bit of the truth in the last 12 years I've done work for them. Your views are quite skewed likely by the one sided media. You totally leave out the reality that the federal gov't won't allow USPS to charge enough for stamps to cover expenses. Did you ever look what Canada charges for postage??? How does 90 cents work for ya??? That would be a start. USPS is also constantly battling local and national politicians who won't allow them to make sound financial decisions like closing and consolidating facilities...........especially in election years! ........thanks Obama. I have been directly involved with these situations up close and personal, adversely affecting my travels. We are funded only 40-60 cents on the dollar for facility repairs and maintenance. Try that at your house. I inspected the Rockford, IL plant a few years ago when a politician showed up to view the operations, and the entire processing line shut down after the first shift, when he arrived. Because there was nothing left to process. USPS was desperately trying to close it, but politicians blocked it. You should not spout off without all the facts, nor without 90 cents in your pocket for a stamp.
Zim,
The fact is they are a money losing quasi-government agency. Period. The views aren't skewed. They are right from their own site. Nothing I have posted is incorrect. They have NO accountability. I just sent another package back for a return. Two weeks ago. They have no idea where it is. Second package in a month. Not only am I out the shipping cost, I'm out the cost of what I was returning. Nice.
As far as closing facilities, the most push back is from the unions. Really don't care. They are a bloated inefficient agency that needs gutted or shut down. Majority of my mail (and I suspect others) is junk mail. All my bills are handled on-line.
As far as .90 cents, it's irrelevant. I mail very few things. maybe one or to items a month. I suspect others are the same. Raising the price won't improve the inefficiency.
You enjoy the bloated bureaucracy. As you put it "Because creeps like this will never be able to touch us. Too big a fish to fry".
Bowbender, Wrong, Wrong & Wrong. You don't know what you are talking about. The 90 cent example is just for a standard envelope. But all the Canadian postage fees for packages are accordingly much higher than USPS, because they are allowed by their government to charge enough to cover their expenses. USPS is NOT. Let me ask you friend, since you hands down know all the facts.............Based on USPS Great Lakes Area real estate department NODE studies, tell me how many USPS facilities were slated to close in the months leading up to the Obama re-election, but were not allowed to..............per direct orders from the federal government? No excuses, just tell me the answer since you know it all.
Also, you are dreaming if you seriously think Amazon or any other company is going to take over package delivery from USPS. USPS owns the most real estate in the US in terms of building square footage, land square footage and dollar market value. Nobody is even remotely close. Amazon has probably <1% of the infrastructure, but that is just my guess. UPS, Fedex, Amazon etc. all use and greatly depend on USPS because their cost is held artificially low by the feds.
And speaking of accountability. What up with Amazon??? I sent a $200 gift card to my son in San Antonio for their baby shower. The card was handled and "delivered" via their own delivery truck, not USPS. My son never received it. Three days later is was redeemed for Amazon goods by a mystery person who they won't identify. Amazon simply claims it was delivered and refuses to replace it. I call both my local police and San Antonio police and they won't do anything. That's private industry for you. Both Amazon & police claim I am SOL. You call that accountability?
Saw one video on YouTube of an Amazon delivery man caught stealing the very package he just delivered.
Well, since this thread went sideways already...Zim, you’re correct that the USPS isn’t allowed to set it’s own rates, however Bowbender’s take on the lack of accountability is spot on. As far as packages/gift cards, etc, being lost stolen by employees? Unfortunately, it happens with all delivery services. The only difference is the postal inspection service will investigate all such occurrences concerning the USPS.
we had a recent event with usps. A package was sent to us and usps sent it to the wrong address. we said, go get it back, they said the recipient said they never saw it. USPS won't replace the value, the shipping people say they don't owe anything, they did every thing right. A basic case of there you are, shur sucks.
Meindl boots opened up their US store in Sidney since Bass Pro take-over.
