Major Outdoor Merger

HAMBURG, Pa. - Folks from these parts love to hunt and fish - and maybe that's why Cabela's, with the slogan "World's Foremost Outfitter," dwarfs everything in the neighborhood.

So imagine Crystal Fogal's dismay when she heard that competitor Bass Pro Shops was acquiring Cabela's Inc. in a deal said to be worth $5.5 billion.

"I was surprised," said the 43-year-old mother from Sayreville, N.J., as she combed through women's apparel clearance racks with her 18-year-old daughter at Cabela's last week. "Look how big they will be."

Just like that, fishing equipment supplier Bass Pro Shops almost doubles its revenue, becoming the biggest fish in the outdoor sporting goods sector by acquiring hunting giant Cabela's.

Economists usually frown when competition is diminished, since it can lead to higher prices and product sameness. The overlap of Bass and Cabela's stores in Texas, Missouri, and Kansas will also raise antitrust concerns.

Yet the proposed deal "combines premier brands in the outdoor sporting goods industry with complementary business philosophies, product offerings and geographic footprints," wrote Moody's retail analyst Mike Zuccaro on Oct. 3 when the announcement was made. The deal enables both companies "to take advantage of each other's strengths - Cabela's has hunting equipment and credit card/loyalty program expertise; Bass Pro has fishing equipment and boat expertise."

He also underscored how the deal was risky, since it was unclear how many stores or positions would be eliminated or just how much debt Bass Pro would take on to close the deal.

Experts say brace yourself for even more consolidation and for surviving firms to specialize even more.

A similar deal occurred in late June when Dick's Sporting Goods staked claim to the Sports Authority name, intellectual property rights, including its website, loyalty program, customer files and email lists, as well as 31 store leases for $15 million in a bankruptcy auction.

Shaner Brown, 35, an avid fisherman from Egg Harbor Township, N.J., shops at both Bass and Cabela's for apparel. He said he expects the choice in fishing equipment to improve since the two will no longer be competing.

"If Cabela's has four fishing pole brands and Bass has four, now you have eight brands to pick from," said Brown, a professional first mate and captain of the Spring Fever Charter Boat in Atlantic City that offers high-end charter fishing. "It's a bigger selection, so I would probably check them out even more."

Some say the Bass/Cabela's deal is in response to slumping sales and struggling profit margins at Cabela's, which reported a 9 percent decrease in operating income in 2015.

Cabela's generated $4 billion in revenue last year, nearly half from hunting equipment, including firearms and ammunition. Zuccaro said the retailer had considered a sale or reorganization for nearly a year after closing 64 stores in 2014. It now has 67 stores operating in North America and employs about 19,300 people.

Bass Pro Shops is privately held with about 99 stores in the United States and 20,000 employees. It generated $4.45 billion in revenue in 2015. It is unclear if any Cabela's will close once the deal clears.

"We haven't been informed that this store was in any danger," said the front greeter at the Hamburg Cabela's last week.

A July 2016 report by New York-based IBISWorld said the sporting goods industry's revenue growth is projected to be 1.1 percent in the next five years, to $49.1 billion in 2021. So consolidation will likely continue "due to intensifying competition from department stores, mass merchandizers and online retailers."

Of Cabela's and Bass coming together, "I don't think it will have a huge effect," said Brent Sonnek-Schmelz who, with his brother Blake is resurrecting the City Sports brand after buying the intellectual property rights at a bankruptcy auction in December. "The two chains operated in mostly different markets, so we should not see a big change for consumers."

But "I do see a lot of changes in the sporting goods market," he added. "The next five years will see continued consolidation in the large chains and increased specialization as customers demand expertise from the stores where they shop. The internet will drive much of this, as pure price competition becomes more difficult."

Brent Sonnek-Schmelz said an online City Sports website will soon be launched, and there are plans to open the first new City Sports in Red Bank, N.J., over the holidays, with a downtown Philly store opening in 2017.

Bass Pro Shops, headquartered in Springfield, Mo., was founded in 1971 by Johnny Morris, who initially sold fishing supplies out of the back of his father's liquor shop. The billionaire will lead the newly combined entity as CEO and majority shareholder.

Cabela's was founded as a mail-order business in 1961 by its namesake, Richard Cabela, and is headquartered in Sidney, Neb. It went public in 2004; but the Cabela family retained a 25 percent ownership stake.

In Pennsylvania, the nearest Bass Pro to Philadelphia is in Harrisburg. Cabela's opened a store 55 miles northeast in Hamburg, in 2003, but also has a store in Newark, Delaware at Cristiana Mall. The Bass Pro Shops "Outpost" in Atlantic City opened in April 2015.

Both Bass and Cabela's sell apparel by brands such as Columbia, Under Armour and the North Face. Cabela's stores often display museum and educational features, such as taxidermied wildlife, large aquariums and archery ranges. Bass shops often feature display aquariums (such as the one in Atlantic City), along with boats, guns and camping gear.

Tom Scanlon, 67, a retiree from Levittown, bought two hearing aids, at $1,300 apiece, at Cabela's in Hamburg last week. He said it was the lowest price he could find and made the two-hour trek worth it.

"It is what it is," Scanlon said of Bass taking over Cabela's. "I just hope prices don't go up."

sparmley@phillynews.com

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@SuzParmley