Anchorage’s two biggest outdoor stores are now one, but what it means for the future is unclear.
Bass Pro and Cabela’s on Monday announced they’d closed a $5 billion deal for the former to acquire the latter. Each have stores in the state’s largest city. Together the two stores employee more than 400 people.
Bass Pro’s 80,000-square-foot “Anchorage Outpost” is just off the Glenn Highway in Mountain View on the way north from the city to the Matanuska-Susitna Valley, the Copper River basin, and hunting and fishing hotspots beyond.
Cabela’s 100,000-square-foot store is not far off the Seward Highway in South Anchorage on the way from the Ted Stevens International Airport to the fabled Kenai River and the many other wilderness attractions of the Kenai Peninsula.
Square-footage-wise, the two were by far the biggest outdoor retailers in the Anchorage Metropolitan Area. Whether one company can justify running two outdoor mega-stores in the city remains to be seen.
“Financially, if you just look at sales, it doesn’t make sense to have both of them open,” John Staser, the owner of Mountain View Sports Fly Shop in Anchorage, Mountain View Sports in Seward, and an outdoor apparel store in downtown Anchorage, said Wednesday
Now 57 years old, Mountain View is the oldest surviving outdoor retailer in Anchorage. It traces it roots back to a small shop once within spitting distance of the huge, new Bass Pro store in a northeast Anchorage neighbhorhood that grew up along with the adjacent Elmendorf Air Base during World War II.
Over the years, Mountain View Sports managed to weather a tsunami of competition from the once market-dominance of the now gone Gary King Sporting Goods to the arrival of Sports Authority, the once dominant national sporting goods chain. It went bankrupt last year.
The former Sports Authority store, not far from the Cabela’s in Anchorage, is now being renovated for sale. It anchors the south end of a mall that contains Sportsman’s Warehouse, a national outdoor retailer that declared bankruptcy in 2009 but managed to survive.
It was still on the ropes when Cabela’s opened its Anchorage store amid much fanfare in 2014. The Bass Pro store opened not long after as the two national giants – publicly traded Cabela’s and privately owned Bass Pro – fought for market share.
Two years ago, Diamond Hill Capital Management, a respected consultancy, estimated the national outdoor retail market to be worth “roughly $60 billion with Wal-Mart commanding the largest share at around 15 percent, (Cabela’s) the second largest share at around 4 percent and Bass Pro-Shops with about 3 percent share of the market. (Cabela’s) is a strong brand that…pursued a conservative strategy of grounding its catalog business in a small base of destination stores, designed to showcase its products and reflect the lifestyle of its customers.
“Thus, for many years, (Cabela’s) operated in what seemed to be a benign competitive environment, pursuing a balanced approach to growing its direct-to-consumer and retail businesses. But like so many good brands (Starbucks, Gap, and Coach to name a few), we believe aggressive retail growth strategy puts it at risk of over saturating its target market.”
Anchorage was part of that retail growth. Staser and some others think the Anchorage market is among those over saturated. Along with Bass Pro, Cabela’s and Sportsman’s Warehouse, it has a busy REI, several Walmart Superstores, Fred Meyer shopping centers hawking outdoor gear, and a wide and diverse variety of specialty outdoor stores selling everything from fishing gear to guns to bikes to skis to the latest in high-tech climbing equipment.
Michael Zerman at Bass Pro Communications offered no insight into the fate of the two Bass Pro/Cabela’s stores now in Anchorage. He emailed links to statements on the Bass Pro and Cabela’s websites, and said “while we don’t have all the answers today, we will continue to update these pages as we unite together.”
Staser noted that Bass Pro, unlike Cabela’s, is a privately owned company and thus required to say nothing about its business plan unless it chooses to do so. But, he added, there have been no hints from Anchorage realtors that the company has been shopping either of the Anchorage stores, and people in the real estate business are usually the first to know of any big moves underway.
And even if Anchorage lacks the sales volume – or at least the non-tourist-season sales volume – to justify keeping two stores open here, he said, “there could be other considerations….Cabela’s owns that property, I believe, and they’re in the early stages of the depreciation of the building.
“That might be reason enough just to keep the doors open.”
The Municipality of Anchorage valued the Cabela’s 11-acre site and store at $18.5 million after construction. It is now appraised at $22.5 million. Bass Pro leases from JL Properties Inc. which owns the Glenn Square shopping center.
“I think in the long run one of the stores will not be a retail (outdoor) store,” Staser said.
He speculated one of the stores could become a marine center – Bass Pro does a big business in boats and ATVs – or a distribution center for rural Alaska business – Cabela’s mail order operation remains big in Bush Alaska.
“I would love to see one of them close,” he admitted, “but I’ve learned, you just don’t know until it happens.”
Officially, Bass Pro and Cabela’s were both singing the virtues of the merger in their official announcements.
“Bass Pro Shops and Cabela’s join forces with a vision to become North America’s premier outdoor and conservation company” is how Bass Pro put it on the company website. “New ‘best-of-the-best’ model better serves all who love the outdoors.”
The Cabela’s version of the deal echoed that theme.
“Combined Company to Offer Enhanced Experiences for Outdoor Enthusiasts with Complementary Product Offerings and Geographic Footprints” it claimed on its website.
And the deal was clearly good for Cabela’s stockholders. They cashed out at $61.50 per share on stock that was trading at near $52.82 back in May, shortly after news emerged of the proposed Bass Pro acquisition.
The Motley Fool, a website devoted to business and the stock market, questioned the sale in July, however, with analyst Rich Duprey writing that despite a booming firearms business in recent years, “Cabela’s was not able to capitalize on it. It seems to be suffering the same ill effects on its apparel business that every other brick-and-mortar retailer is afflicted with. More troubling is that Cabela’s can’t get its e-commerce business to gain traction.
“Bass Pro Shops may have won the chance to acquire its rival, but it may rue the day when Cabela’s shareholders said yes.”
Sports Authority was the largest sporting goods retailer in the country in 2006 and a mainstay in the Anchorage market, and yet it managed to go bankrupt just eight years later.
CNN blamed that failure on “competition from big box stores, as well as online threats from Amazon and websites run by major sports leagues like the NFL and NBA that sell team merchandise.”
And Sports Authority wasn’t the only outdoor retailer to go under in 2016. Minneapolis-based Gander Mountain, another well-known outdoor brand, also folded blaming “shifts in consumer demand resulting from increased direct-to-customer sales by key vendors and accelerated growth of e-commerce.”
E-commerce – shopping over the internet – is today’s equivalent of the catalog sales that originally made Alaska an attractive market for Cabela’s. When the company opened its Anchorage store in 2014, officials told former Anchorage Daily News reporter Mike Dunham that “poring over Alaska catalog orders from the past 50 years helped guide decisions about the store inventory.”
Mail order, or what is now called e-commerce because the orders are placed via the internet, remains big business in Alaska.
“On-line shopping is probably the method most Bush teachers use to buy things,” the University of Alaska Fairbanks advises on its Alaska Teacher Placement website. “Don’t buy stuff guerilla shopping (while traveling to Anchorage or Fairbanks) that you are better off getting from Amazon or Walmart. Amazon Prime is your best friend! For a while they didn’t offer free shipping to rural Alaska, but they do now. Remember that Prime means free 2-day shipping in the Lower 48. Up here, it means “fast as humanly possible”, so don’t expect it two solar cycles. Some things may be free from one Amazon vendor, but not others. Be careful.”
Whether Cabela’s and Bass Pro will continue to run separate e-commerce operations or merge those into one is an unknown. Cabela’s brand outdoor wear has long been one of the company’s leading products.