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| GMTN > SEC Filings for GMTN > Form 10-Q on 16-Sep-2008 | All Recent SEC Filings |
16-Sep-2008
Quarterly Report
Forward Looking Statements
The following discussion may contain forward-looking statements regarding us, our business prospects and our results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those described in Item 1A-"Risk Factors of our Form 10-K for fiscal 2007". Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Commission that advise interested parties of the risks and factors that may affect our business.
Overview
Gander Mountain Company operates the nation's largest retail network of stores specializing in hunting, fishing, camping, marine and outdoor lifestyle products and services. As of August 2, 2008, we have expanded our store base to 115 conveniently located Gander Mountain outdoor lifestyle stores, providing approximately 6.5 million square feet of retail space in 23 states: Alabama, Arkansas, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Mississippi, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, Virginia, West Virginia and Wisconsin. During the second quarter of fiscal 2008, we opened two new stores, one of which was a relocation of a store that closed during the first quarter of fiscal 2008. These two stores complete our five new store openings for fiscal 2008.
Our core strategy is to provide our target customers with a unique and broad assortment of outdoor equipment, accessories, related technical apparel and footwear; expert services; convenient locations and value pricing. Our stores feature an extensive selection of leading national and regional brands as well as our company's owned brands. In March 2003, we began transforming our market position from a traditional specialty store to a large-format, category-focused store. We did this by opening new stores in a large format and increasing the selling space within our original, small-format stores. Prior to March 2003, our typical store was approximately 31,000 square feet. Our large-format stores range from approximately 50,000 to 120,000 square feet, with our current focus primarily upon stores of 60,000 to 65,000 square feet plus an outside selling area. Our large-format stores are generally located with convenient access to a major highway and have an open-style shopping environment characterized by wide aisles, open bar-joist ceilings and high-density racking. To further build upon our brand's reputation for high quality and exceptional value, we are outfitting certain stores and our new stores with additional features such as brick and stone accents, log-wrapped columns, and improved branding, fixture, flooring and signage elements. As of August 2, 2008, 73 of our 115 stores were in our large format.
On December 6, 2007, we acquired Overton's, Inc., a leading internet and catalog marketing company targeting recreational boaters and water sports enthusiasts. Overton's product line is extensive, ranging from water skis, wakeboards and apparel to electronics, boat covers, boat seats and other marine accessories. Overton's products are sold under two principal brands, Overton's and Consumers Marine, through a multi-channel approach that includes catalogs, websites (www.Overtons.com and www.Consumersmarine.com) and three retail showrooms. Overton's is a wholly-owned subsidiary of Gander Mountain headquartered in Greenville, North Carolina.
Since the acquisition of Overton's, our consolidated reporting includes our two reportable segments: Retail and Direct. The Retail segment sells its outdoor lifestyle products and services through its 115 retail stores located in 23 states. The Direct segment is comprised of the internet and catalog operations of Overton's, offering primarily boating and watersports accessory products through numerous direct mail catalogs and its e-commerce websites, as well as the newly developed e-commerce and catalog efforts of Gander Mountain that will focus on product categories different than that of Overton's boating and marine related business. During the second quarter of fiscal 2008, we achieved a critical milestone in the development of the Gander Mountain direct marketing business. On August 3, 2008, we launched our new transactional website, "Gandermtn.com"which offers an initial selection of nearly 12,000 SKU's. We will begin to grow the product selections and add additional SKU's over time. During the quarter, we also made significant progress in the development of our first catalog since 1996. Distribution of the 244 page Gander Mountain catalog commenced in early September 2008.
Included in our consolidated sales for the first and second quarters of fiscal 2008, are Overton's sales of $19.7 million and $39.7 million, respectively. There were no sales during the quarter from the Gander Mountain e-commerce or catalog operations because those operations did not start until the third quarter of fiscal 2008.
The continued operation of Overton's, along with our launch of Gander Mountain's new e-commerce and catalog efforts are important initiatives toward building a multi-channel national retail operation.
Recent Update
Mark R. Baker, who served as our president and chief executive officer, as well as a member of our board of directors, resigned from all of the positions he held with our company on September 8, 2008. Mr. Baker has agreed to remain as an employee of our company during a transition period ending on September 30, 2008.
David C. Pratt, the chairman of our board of directors, has been appointed as our chief executive officer, on an interim basis, effective September 8, 2008. Mr. Pratt will continue to serve as the chairman of our board of directors, but has resigned from the compensation and governance and nominating committees of our board.
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