Bass Pro’s purchase of Cabela’s hasn’t exactly been smooth sailing. Poor quarterly earnings, in part due to a depressed firearm market as well as the liquidation of Gander Mountain’s gun inventory, caused the two outdoor retailers to have difficulties. In addition, the powers that be wanted to sell Cabelas finance arm. Unfortunately, that kind of thing requires government approval.
According to Guns.com, though, they got it.
Federal regulators approved part of the pending Cabela’s multi-billion dollar merger with Bass Pro Shops Wednesday, sending its share prices up more than 14 percent in after hours trading.
With the Federal Reserve’s green light on Cabela’s sale of its consumer credit financing arm — World’s Foremost Bank — to Synovus Financial Corp, out of the way, the $5 billion buyout deal can proceed.
Bass Pro Shops bought Cabela’s in October for $5.5 billion, or $65.50 per share. Later the Missouri-based sporting goods chain restructured the deal for a lower share price of $61.50.
After Cabela’s weak second quarter sales, however, investor analysts cautioned the retailer could be desperate to close the deal, while Bass Pro Shops may see its former competitor’s tumbling stock as a cost-saving opportunity. All eyes turned to the fast-approaching Oct. 3 deadline from the feds to approve the credit sale to Synovus, who will subsequently sell the operation to Capital One, while keeping $1.2 billion in deposits.
So what will this mean for gun owners?
It’s really too early to tell, though my concern is in the reduction of competition in the gun market may end up as a net negative for gun buyers. That said, it’s not like Bass Pro Shops or Cabela’s is in every market in the first place. However, even before the close of Gander Mountain, many locales only had locally-owned gun stores or big box retailers that happened to also sell guns.
Additionally, Gander Mountain’s prices were…problematic, to say the very least. I’ve heard similar complaints regarding Cabela’s and their gun prices.
All that together indicates there will be little to no impact firearm prices for the average consumer, which is good. Especially if you buy from a local gun store which, at least in my experience, tends to be a bit more cost effective anyway.
In the meantime, it appears that Bass Pro is planning on laying off some of the 2,000 employees at the Cabela’s corporate headquarters in Sydney, Nebraska.
The deal is now expected to close before Oct. 3. Though Bass Pro Shops will continue to use the Cabela’s name and keep its stores open, there are likely to be layoffs of Cabela’s employees in Sidney, where the outdoors retailer has its headquarters.
The company employs around 2,000 people in the town of about 7,000, and though Bass Pro has said it plans to keep a “significant” presence there, it has acknowledged that there will be job cuts.
The outlook for Lincoln is brighter. Capital One has said it plans to keep the credit card operation based in Lincoln and appears likely to keep most if not all of the more than 500 people working there.
With a town that small, it seems unlikely that the layoffs will be particularly painless. Even a relatively modest layoff will negatively impact a significant portion of the community.