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As noted in a breaking news story last week, UFA Co-operative Ltd. of Calgary is in the process of acquiring Sportsman's Warehouse, the largest outdoor retailer in the New West. UFA stands for United Farmers of Alberta, so after the article came out several readers wondered why a Canadian farmer's coop would buy a chain of sport stores in the United States. With the kind assistance of UFA's cooperate communications manager Natalie Dawes, today I had a chance to ask UFA's President and CEO Dallas Thorsteinson that question.

UFA’s CEO Explains Acquisition of Sportsman’s Warehouse

As noted in a breaking news story last week, UFA Co-operative Ltd. of Calgary is in the process of acquiring Sportsman’s Warehouse, the largest outdoor retailer in the New West. UFA stands for United Farmers of Alberta, so after the article came out several readers wondered why a Canadian farmer’s coop would buy a chain of sport stores in the United States.

With the kind assistance of UFA’s cooperate communications manager Natalie Dawes, today I had a chance to ask UFA’s President and CEO Dallas Thorsteinson that question.

“We are no longer that sleepy little agriculture coop,” Thorsteinson explained. “We’ve re-positioned ourselves away form the all-things-ag business model. We’re actually a diversified rural cooperative interested in all rural-related business. We support living, working and playing on the rural landscape.”

So, he said, the hunting, fishing and outdoor adventure business fits ideally with the new plan, which started with UFA’s purchase Wholesale Sports, western Canada’s largest outdoor retailer, earlier this year.

“That (acquisition) was the beginning of our outdoor adventure strategy,” he said. “Now, overnight (with the purchase of Sportsman’s Warehouse), UFA has launched itself as a billion dollar outdoor adventure company.”

He refers to the combined annual revenue of the two companies, 80 percent or $800 million from Sportsman’s Warehouse. Cabela’s, in comparison, has about $2.6 billion in annual sales.

Wholesale Sports is Canada’s version of Sportsman’s Warehouse, only with smaller and fewer stores, eight compared to 69. “The only real difference between the two is that Wholesale Sports is more profitable and has more growth potential. Otherwise, the footprints are similar.”

Thorsteinson said he plans no immediate changes at Sportsman’s Warehouse’s operations, marketing or product mix. “When we buy companies, we take a little time to get to know them. We don’t like to make mistakes early when we have a lack of understanding.”

The only immediate change will be replacing current chief executive Stu Utgaard with a new divisional vice-president, he said. “Otherwise the management team will stay. We’d love to have all managers stay, and we’re extremely impressed with the work they do.”

And, he assured, there are no plans to close down or downsize the Salt Lake City headquarters or move it to Calgary. “We like the infrastructure in Utah, and it will likely go the other way.”

By that, he explained, the two retail chains will be eventually be combined into one brand and one product mix, and that combined operation likely to be run out of Utah.

Most expansion will, however, be in Canada, he noted, where the outdoor retail market is less crowded. “The opportunities look better in Canada right now.”

Nor do Sportsman’s Warehouse employees need to fret, he insisted. Acknowledging that things haven’t been all happiness at Sportsman’s Warehouse lately because of depressed sales and inventory shortages, “we’re feeling pretty good about helping out those 5,500 employees, and they do not need to worry about their jobs.”

In explaining the status and nature of the deal, Thorsteinson cautioned that due diligence is still underway. “All comments are subject to successful due diligence,” he explained, but UFA is acquiring 80 percent of the assets of Sportsman’s Warehouse and leaving 20 percent for the current owners and equity investors who will become minority shareholders.

Even with the laws of two countries coming into play, he does not anticipate any government complications or delays in closing the deal.

And Thorsteinson assured, UFA is in it for the long haul. “We’re Warren Buffett-style investors. We buy, hold and build. We’re absolutely committed to that type of operation.”

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13 comments

  1. Outstanding!!!

  2. I loved the story and wish it were true! I have a family member who works at Sportsmans Warehouse as a Receiving Manager and was laid off due to “economic problems” as of January 1, 2009. So much for not laying anyone off. I realize that UFA hasn’t taken over yet, but I hope they reverse what Sportsman’s did in December because they crushed a LOT of families to make their bottom line look better. Maybe there should be another look at the store…and the story.

  3. Great story, but it sure isn’t happening. Just two weeks after this story was posted, all but a handful (mostly field managers) of receiving managers were laid off. I know that was ultimately Stu’s call, or if not, someone high in Sportsman’s corporate. But now that UFA has taken over, we would think that they would do the sensible thing and reverse this unthinkable decision, right? So far, that has not been the case. There has been no mention of bringing back any receiving managers; in fact, there has been a training session for department managers to teach them how to do receiving’s job. My department has suffered enormously due to this change, WE NEED RECEIVING BACK!!!

  4. I think it sucks!! I don’t understand why or like the fact that American companies are selling out to and being ran by foreign counries. Stop selling out to foreigners!!

  5. You have a store in Indiana that has filled a need that was sorely missed in this area and now you are going to close the store. A lot of people will miss having a good place to shop for outdoor equipment that is close by.

  6. So I understand that UFA has finally signed to purchase SOME of Sportsman’s Stores. That is awesome and we look forward to all the positive changes that you can do for us. Please Please bring back Receiving Managers positions. They are needed and the people who were doing the jobs need to be brought back. My son was doing an excellent job per his boss and yet the job was done away with. Bring him back!! Please also remember, that even though CANADA owns the stores, the USA buys from them. If you do right by us, we will shop at your stores. If you don’t do right by the communities and the employees who have been loyal, we won’t be loyal to you. I KNOW that you read these comments. You would be foolish not to. You would also be foolish not to take them to heart. An unhappy person makes a whole lot MORE noise than a happy one. Please spread the word. We want our RECEIVING back!!

  7. “Otherwise the management team will stay. We’d love to have all managers stay, and we’re extremely impressed with the work they do.”
    This was Thorsteinsen’s quote in the paper. Will you hold to your word? We will see. Will we shop there? We will see.

  8. I read in this mornings Oregonian (3-12-09) that UFA will not honor gift cards issued by sportsman whse, I hope that is a misprint as many people have them and for one I would certainly advise no one to shop at ufa stores

  9. I was told that the UFA stores are going to do their best to honor the gift cards but it isn’t UFA’s fault. Sportsman’s is not going to allow them to honor the cards. UFA is going to do phone orders to other stores to honor the customer. UFA is getting the short end of this deal right now. If you knew the inside story, you WOULD shop there. That is, if they bring back the RECEIVING MANAGERS!!~!

  10. UFA “acquired” 15 SW stores, they didn’t buy them. They were collateral for a 70-90 million dollar loan from UFA, and were acquired when Stu defaulted on the loan. None of the receiving managers were “laid off”; the billets were eliminated (BEFORE the acquisition) and the people were offered jobs elsewhere in the company. Granted, the alternate positions were universally lesser pay, but they were NOT laid off. Also, NO field managers or store employees have been laid off since UFA took control of their 15 new stores. UFA also honored SW gift cards til the end of March… at a 100% loss to them. SW has the money the cards were purchased with and did not reimburse UFA for the redeemed cards. You wouldn’t expect Wal Mart to accept your Target gift card, would you? Why would you expect UFA to accept SW gift cards? Stu also got out of his obligation to buy back earned PTO from the employees of the 15 UFA stores by declaring bankruptcy a week after turning over possession of the stores. I understand his wife also caught him with his maid or stewardess or whatever he called her and a divorce may be in process. SW will likely be nothing but a memory in a year or two.

  11. Not laid off but the receiving managers were “Offered” different positions. Funny how the receiving departments are STILL running with no managers employed there. When are you going to do the right thing and reopen the Receiving Managers positions in the stores that you had them eliminated? Getting very frustrated with broken promises and am EXTREMELY vocal in my opinions to friends and fellow workers. You might want to consider placing your money where your mouth has been. Just a thought….

  12. UFA has given the go ahead to re-hire dedicated receiving personnel, rather than pull people from other departments to do the job. It appears it will be a non-management hourly position just as it was before. (Yes, I realize the position used to be called “receiving manager”, but it was an hourly position in the past with no additional managerial duties, so it hasn’t changed.)

  13. That would be very nice if the deserving people received their positions and pay scale back where it was before Stu messed things up for them. It was promised and now it appears that that promise MIGHT be fulfilled. Let’s hope for the best….should hear something positive soon.