Cabela’s senior leadership blamed the company’s disappointing second quarter sales performance on Gander Mountain’s ongoing liquidation, according to a statement released last week.
The Nebraska-based sporting goods chain reported a 9.7 percent decrease in second quarter same store sales Thursday, as Internet and brick and mortar profits dipped 3.9 percent and 6.7 percent, respectively. Net income plummeted nearly 25 percent over 2016.
“Merchandise sales were challenging in the second quarter,” said Tommy Millner, Cabela’s chief executive officer, in a press release Thursday. “Since the fall election, we have continued to see a slowdown in firearms and shooting related categories. This slowdown was even more pronounced in the second quarter due to the impact of inventory liquidation by a major competitor who has filed for bankruptcy as well as the anniversary of a number of events from a year ago, including the Orlando tragedy in June of 2016.”
Gander Mountain filed for Chapter 11 bankruptcy protections in Minnesota court on March 10. Camping World, the nation’s largest recreational vehicle dealer, led the investor group that bought out $390 million worth of Gander Mountain assets, including its Overtons boating business, during an April 28 auction. CEO Marcus Lemonis said a separate liquidation company bought the store inventory currently on sale across the country.
Lemonis will close more than half of the chain’s 162 locations and rename the surviving stores Gander Outdoors as he attempts to fix years of “bad inventory buying,” including $100 million wasted on a “bad assortment of guns.”
“I’d rather have 50 stores heavily curated for that local market than 150 stores that look like everything is the same, which is essentially what it was,” he said. “Just a really shitty inventory system is what they have … never seen something so stupid.”
Estimated gun sales plunged 26 percent in July compared to last year, following a 12 percent decline in June. The summer slowdown tailed an unanticipated busy spring for federal background checks — and by proxy, gun sales — though retailers and gun makers have suggested the “promotion-heavy sales environment” artificially propped up National Instant Criminal Background Check System data in the second quarter.
Bass Pro Shops acquired Cabela’s in October for $5.5 billion. The two companies agreed to forgoing quarterly conferences with investors amidst the acquisition process.
