Hoffman Estates Cabela's to lay off 40
Cabela's has announced it will cut 40 full-time jobs from its Hoffman Estates location because the superstore is underperforming.
The cuts are representative of a slumping national economy, Cabela's spokesman David Draper said. The chain, which bills itself "the world's foremost outfitter," also plans to slash 40 jobs from its Hammond, Ind., store, which opened Oct. 19.
The announcement comes just five months after the outdoor gear chain moved into Hoffman Estates -- and the Chicago area -- with much hoopla.
The Hoffman Estates store, in the Prairie Stone Business Park off Route 59 and the Jane Addams Tollway, and the Hammond store are unusual for Cabela's in that they're in urban areas.
Moving into such a market represented a bit of a risk for the chain that sells items including guns, camping gear and boats. Draper painted an optimistic economic picture for the rest of the year but didn't rule out further cuts to the rest of Cabela's 24 stores across the country.
Last week, Sidney, Neb.-based Cabela's said fourth-quarter earnings rose 5 percent, matching analyst expectations.
The company said it still will open two stores this year but is slowing its expansion plans to focus on existing stores. It expects earnings in 2008 to grow in the mid-single-digit percentage range.
Laid-off employees will be given 80 hours of pay and are eligible for benefits through March, Draper said. The cuts leave the Hoffman Estates location with about 250 employees, he said.
"They have been doing notifications since Wednesday about the ongoing terminations," Draper said.
Cabela's opened its $32 million, 185,000-square-foot superstore with the help of $18 million in incentives from Hoffman Estates. In turn, the store is projected to bring about $1.8 million to the village and $675,000 to Cook County in yearly sales tax receipts.
Hoffman Estates Mayor William McLeod said he wasn't overly surprised by the news, and pointed to the winter months as typically slower for retailers. He also noted that both the nearby Sears Centre arena, which opened in 2006, and Cabela's are new businesses that "got out of the gates slower than anticipated."
"It's just a bump in the road," McLeod said.
Though Cabela's might be underperforming, it isn't close to defaulting on its incentive agreement with the village, he said.
McLeod and Village Manager James Norris could not provide sales tax receipt numbers, saying they aren't available yet.
The store initially hired 400 employees, but attrition accounts for some of the drop in jobs. Many part-time workers also saw their hours cut over the past few months as well.
Jill Blodgett, executive director of the Hoffman Estates Chamber of Commerce, said residents should be patient and that the layoffs don't mean Cabela's and the rest of the companies in the business park won't succeed.
"I think we just all have to wait and see what happens out there," she said.
She also said Cabela's has a specialized audience.
"The products and services that Cabela's have are not generally the ones that one needs to survive." Blodgett said. "I understand where people are putting their money first to pay for the rent and mortgage."