A funny thing has happened on the road to selling Cabela’s, the giant retailer of hunting, fishing and outdoor gear.
The company, instead of placing the entire 27-store chain on the block, has decided to first sell its highly profitable credit card operation, The Post has learned.
And since Cabela’s is seeking special conditions to the sale of its credit card operation — the Sidney, Neb., company wants to retain the profit stream from the business — some close to the process think an eventual sale of the brick-and-mortar chain may never occur, sources said.
Meanwhile, Bass Pro Shops, a rival that in the past has expressed interest in buying Cabela’s, is stuck on the sidelines as banks kick the tires of the credit card operation, sources said.
Together, sources said, the issues are slowing a sales process that started back in October when activist investor Elliott Management bought an 11 percent stake in Cabela’s and pressed for management to seek strategic alternatives — including a sale.
The decision to first sell the credit card operations — responsible for about 30 percent of the chain’s $3.6 billion in sales — was a surprise, sources said.
However, it could make the company easier to sell.
Plans are to sell ownership of the credit card operation — while retaining the profit stream. That would relieve Cabela’s of regulatory oversight and increase profits.
Whether or not Cabela’s is serious about selling its entire business will become clearer in about two months, a source predicted.
Elliott Management has said that, including options, it owns an 11 percent stake in Cabela’s, and the Paul Singer-controlled firm could launch a proxy fight.
All the Cabela’s directors are up for election.
Cabela’s has postponed the time it will accept board nominations from what would have been this month until it sets its annual meeting date.
Last year the annual meeting was in June.
Bass, meanwhile, sits on the sidelines.
The Springfield, Mo., company is controlled by founder John Morris, who is reportedly worth nearly $4 billion. Bass and Cabela’s generate about the same amount of revenue.
But Cabela’s is much less profitable because, sources said, it is still run like a family business with, for example, subpar inventory control systems.
Both rival Bass and private equity firms may see an opportunity to buy Cabela’s, modernize its operations and increase profits.
“Consolidation in outdoor retailing does make sense,” a source said, “as a lot of guys have grown too aggressively.”
Cabela’s shares were trading at $33.42 the day before Elliot announced its stake, and after rising to $46.90 in December closed Thursday down 2 percent to $39.79.
Over the last 12 months Cabela’s shares are down 29 percent. Cabela’s declined comment. Bass did not return calls.
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