NEWWEST.NET Exclusive
Canadian Farmers’ Cooperative Buys Sportsman’s Warehouse
The largest outdoor retailer in the New West is being purchased by Calgary-based UFA Co-operative LldBy Bill Schneider, 11-24-08
UPDATE: At the end of this article, I’ve posted a release I received on 11-26-08 from UFA.--Bill Schneider
Rumors of financial troubles at large outdoor retailers, including Sportsman’s Warehouse, have been swirling around for months. Now, it looks like “America’s Premier Outfitter” has become “North America’s Premier Outfitter.” The largest outdoor retailer in the New West is being purchased by Calgary-based UFA Co-operative Lld.
And it looks like UFA has the cash to do it. On its website, UFA describes itself as “a progressive, multi-billion dollar organization committed to serving rural communities.”
Established in 1909, UFA, which stands for United Farmers of Alberta, has grown from a small-scale local co-operative into an extensive retail and distribution network with 35 farm and ranch supply stores, over 120 gas stations, and more than 110 000 members. And now, it’s expanding from agricultural into outdoor retailing.
In a November 20 letter to employees and vendors obtained by NewWest.Net, Sportsman’s Warehouse Chairman and CEO Stu Utgaard called the transaction an “investment” and “cash Infusion” that will “allow us to improve the flow of merchandise to the stores.” But sources in Sportsman’s Warehouse tell me they consider it an acquisition.
Utgaard’s letter is in response to recent failure of the company to keep adequate inventory on the shelves because of being on credit hold or at least watched carefully by vendors not wanting to increase their exposure when already faced with late payments for past deliveries.
“This cash infusion should support the continued growth and development of the company in the future,” Utgaard wrote, but at the same time, he said goodbye to his 5,500 employees. “I will no longer serve as Chairman and CEO, and may not have any executive authority unless they (UFA executives) discover that I have some redeeming qualities in the future.”
Calls to Utgaard and UFA’s Corporate Affairs office for comment on the sale have not been returned.
UPDATE, 11-26-08: I received this press release today and a note from UFA spokesperson Natalie Dawes who confirmed that “UFA Co-operative Limited is poised to acquire US-based outdoor retailer Sportsman’s Warehouse, which is an important step in UFA’s diversification and growth strategy.”
The full text of the press release follows:
UFA Co-operative Limited’s increases annual revenue by
$800 million with proposed acquisition of Sportsman’s Warehouse
Calgary, AB, Nov. 26—UFA Co-operative Limited is poised to acquire a majority interest in Sportsman’s Warehouse, increasing the co-operative’s annual revenue by $800 million.
Sportsman’s Warehouse is a privately-owned outdoor outfitter with annual revenue topping $800 million and 67 stores in 38 American states. The acquisition aligns with UFA’s strategy to diversify beyond its traditional businesses.
“UFA is a co-operative serving the people who live, work and play in rural communities,” says Dallas Thorsteinson, president and chief executive officer. “Acquiring Sportsman’s Warehouse fits perfectly with our strategy to create sustained valued for our owners by expanding to become a well-rounded rural marketer.”
UFA will acquire a majority interest in US-based Sportsman’s Warehouse. The acquisition is subject to successful completion of negotiations and a comprehensive due diligence process. UFA has already made a significant cash injection into the US retailer to ensure it’s well stocked for the holiday retail season.
UFA is driving a controlled diversification strategy that includes construction and outdoor- lifestyle businesses. As a rural marketer, outdoor recreational products and services are a logical extension of UFA’s existing relationship with customers and members. UFA acquired Canadian outdoor outfitter, Wholesale Sports in July 2008. Sportsman’s Warehouse expands the co-operative’s lifestyle business while financially strengthening the co-operative. With the addition of Wholesale Sports and Sportsman’s Warehouse, UFA is a major North American force in the outdoor adventure industry.
UFA’s 2007 revenues were more than $1.8 billion, ranking it among the 40 largest Alberta companies in terms of revenue, according to PricewaterhouseCoopers and Alberta Venturemagazine. In 2008, UFA revenues will top $2 billion for the first time, having surpassed the $1 billion mark just four years ago.
“UFA is expanding beyond our traditional businesses to ensure that we can continue to serve our customers and owners.” Thorsteinson added, “Our growth reflects our commitment to the people who have owned UFA for 100 years.”
About UFA Co-operative Limited
UFA Co-operative Limited is one of Alberta’s most dynamic enterprises. Canada’s largest re-seller of diesel products serves rural communities throughout Alberta, B.C. and Saskatchewan with a construction division and an unmatched network of retail stores and petroleum outlets. With $2 billion in annual revenues and 120,000 active members, UFA is one of Canada’s most successful co-operatives.
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ON the other hand, I sort of hope it does. The proof is in the pudding, as they say, and having that kind of effort in the Congress is a very good way to begin to delete some super lefty Democrats from Congress. Obama really does not need the Waxman type of zealot driving the legislative process, because it will take time and effort, and eventually creating roadblocks to success, from efforts to do what they told us they were elected to do: fix the economy and end the wars. If that all goes by the wayside in a gun battle, and the electric car wars, and the environmental global warming wish list, grid lock will be close at hand. It is one thing to pass those laws, but it is another to have to run on your vote in two years or four.
My only question about Canadians running SW: will they meet you at the door and ask: Are you carrying a handgun, eh? Have ya got any handguns in the car, eh? Are you intending to buy a handgun, eh? Do you own a handgun, eh? Do ya have it with ya, eh?
I have been in the the "industry" for many years, both in smalls stores and "box" stores. I have to say that better service is not always better in smaller stores as is the case from time to time in larger stores.
As for fitting of a shotgun, etc. The store that I work at has a hunting department that employs three competitive shotgunners, 2 professional hunting guides, two professional armorers (I am one of the two),8 land owners of large tracts of land, 4 accomplished duck huntes, one competitive highpower shooter (Me), 1 3gun shooter (me), and 1 concealed weapon instructor (me), and one retired FWP employee. How many local stores have that knowledgebase?
The situation with the Sportsmans Warehouse is that across the board demand for reloading equipment, ammunition, and the like as been impinged by this little thing called a two front war. I have been told that there will be ammunition and reloading componants hitting the pipeline since the manufacturers have met the quarterly .mil requirements.
Tier 1 and Tier 2 manufacturers have been shifting effort from a balanced delivery (civilian and .mil) to a 3/4 -1/4 effort with the 1/4 being civilian. That being said, there have been a few panic buyers.
As far as epople in large stores not knowing the waters and game lands in Montana, I would put ANY of my co-workers up against a small business owner. Not taking anything away from small businesses, I still shop at local businesses like I have for 20+ years.
We have to remember that we as sportsmen and sportswomen need to realize that it does not matter where we purchase "stuff" as much as that we need to be mindful of the hunting and fishing practices we use.
As for Canadians owning/financing SW, I think time will tell. Obviously the attempt at speedy growth has caught up with SW, but will the new canadian farmer owners say "Are you carrying a handgun, eh? Have ya got any handguns in the car, eh? Are you intending to buy a handgun, eh? Do you own a handgun, eh? Do ya have it with ya, eh?" I doubt it because many Alberta farmers are hunters and fishermen.
Have a great Montana day and lets get into the trees
and the fishing counter is a total joke- flies are not even remotely good enough (selection or quality) for any serious fisherman. same rude dismissive behavior (unless you are part of their clique) as the gun counter but with little or no knowledge.
sorry- no sale glocker 21. i will walk through occasionally when i am in the area. but the checkbook will be used at locally owned shops.
Not trying to sell you on anything. I do like to shop local as much as anyone. What SW store did you visit, behavior like that is totally unacceptable.
If hunters find it offensive than I can imagine what the general public thinks.
October 23, 2008 - 3:28PM
By MICHAEL PACER
HESPERIA
As one of the 85 laid off employees of Sportsmans Warehouse Victoville, I would like to thank all of the customers that I had the pleasure to have met and served at the gun counter. I am sorry if those who made purchases in the last few days were inconvenienced by the sudden closure.
We employees had no idea that Corporate Sportsmans Warehouse had given us the kiss of death.
Having said that, I have to defend Sportsman's because this has absolutely been the best job I have ever had. Management was excellent and fair. Even though sales were lacking, they kept as many employees on full time as the could so they could keep their hospitalization. Retirees like me were put on part time which was bad but a sacrifice I could make.
Their total closing has made things a little rough with Christmas coming and a baby possibly on the way. I am not worried. With an Obama presidency all my needs will be met and I won't have to do anything. Free money, hospitalization, my security needs, food stamps, all for free ... at least that's what the TV commercial said.
Maybe I should join the "gimme somethin' for nothin'" crowd. I'll give up my guns, default on my bills, waste my money on booze and cigarettes, start supporting same sex marriage and abortion but protest the death penalty and join the Democrat Party. It all seems so clear now!
Or, I could get all the "ex-employees" from Sportsmans together and start our own sporting goods store for the high desert! We know all the mistakes they made. It will be easy! Otherwise, there won't be a REAL sporting goods store in the high desert for another decade! How about it Dean, Jeff, Rick, Wayne, Tara ... Doug, let’s do it!
Yeah, losing your job will do that to ya. Bitterness is the mildest of his emotions I think.
Bam - Oct 25, 2008 02:18:11 AM Remove Comment
--------------------------------------------------------------------------------
Mr. Pacer, with all due respect, you are wrong about Obamas postions. Your anger seems misplaced given our country has been run my republicans for way to many years. Now, having said that, there is enough blame to go around in this financial mess . Frankly, you sound BITTER!
OBAMA08 - Oct 24, 2008 09:01:12 AM Remove Comment
Congress constrained them under a Democrat in a time of national emergency. For the better part of the last half of the 20th century, Congress was dominated by Democrat control. Over 40 years in one stretch for the House. And all that time banking became less regulated.
So banking's demise, and now ours and Sportsman's Warehouse's, was due to bank selling stock loss insurance to each other for teensy tiny premiums on huge volumes of equity. I believe the numbers I have seen indicate the total value of that insured equity is over $400 TRILLION dollar. You don't have to have much risk to see that even a 1/1000th loss could be catastrophic on those numbers. And it has been. And SW is just an early participant in that debacle by no fault of their own. There is simply no money out there to borrow. It has all been spoken for to gird the loins of bank bottom lines to keep them solvent for what purpose we now do not know. After the holiday season, look for hundreds of business failures. If you didn't make any money on selling your stock, where will you get the money to replace what you sold at a loss? The downward spiral is going to be steep and deep on the after New Years retail business. Lots of empty store fronts at the mall. How to end this, and where, I don't know. I would think that we will have to start looking at employing people making widgets here instead of Mexico or China. Growing our own food instead of growing our own energy. Changes have to be made, and it is too bad the SW employees lost their jobs. I found it a pleasant place to browse, and at my age, I have no room in the gun safe, way too many fish poles, all the camping gear for two outfits. I don't need anything. I want things, but want and need have a firewall between them when the 401K is now a 101K. You don't get much for selling nothing, and so you might as well hold on to the nothing you now have. My state of affairs, and there are many like me, were not good for SW or any other retail outfits. And an aging America and diminishing use of public lands is a very real part of SW and their take over by another company with hopefully deeper pockets. The younger folks are not buying out of doors stuff at the rate their parents bought.
But in the long haul, it was the really, really smart guys who lost where the rocks were, and there lies the ship of finance....on those rocks, and slipping away to Davey Jone's locker. Life is going to be very interesting for a long while.
Thanks for your great reporting on this matter... it's the only report I've been able to find online aside from UFA's own press release.
Problembear, you're right on - it's the locally-owned and independent stores that usually offer the very best of service. Plus, shopping locally infuses your local economy with more cash than shopping corporate. There's a multiplier effect that is important to remember when shopping locally - for example, you buy from Schnee's Powder Horn Outfitters in Bozeman, MT - then Jon Edwards, President & CEO, sees to it that his (local) employees are paid, and they can go out and spend their money locally - and as such the multiplier effect takes place.
I'd love to get some feedback from folks regarding starting a cooperative group of locally-owned, independently operated sporting goods stores. If you have thoughts, you can email them to
--
Joel VanderHoek
Asst. Operations Manager
<a >
Dave's Sports Shop</a>
1738 Front Street
Lynden, WA 98264
(360) 354-5591
http://www.davessports.com