Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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to get rid of mounted animals. There is "no shortage of taxidermy out there," according to Millner. "The first new- generation stores were immensely suc- cessful, and we started doing more and more of them," said Millner. As for the smaller stores, they were "way more pro- ductive than our bigger stores in terms of profit and sales per square foot." All individual Cabela's stores are profitable, and the company has never closed a store. Since Millner's arrival, the company has opened nearly 30 new stores, almost all of which are near other retailers in major shopping centers. As of midyear, Cabela's units number nearly 60, and the company's new chief seems determined to pursue a strategy of tightly disciplined expan- sion. "We are a patient grower, much like a Costco," Millner said. "We only build 13 or 14 stores a year. We don't want to overbuild." The ultimate build-out for North America would come to roughly 250 stores, and that includes Canada, says Millner. "We love Canada," he said. "We think there is opportunity for 20 to 25 stores there. Currently, we have two stores in Edmonton, and one [each] in Saskatoon, Regina and Winnipeg. New stores will be opening in British Colum- bia; Barrie, Ontario; and Moncton, New Brunswick." Expansion will probably get no more foreign than that for the fore- seeable future, Millner says. Cabela's has been in the catalog and Internet businesses for 50 years, so man- agement knows where its customers live, and this, in turn, dictates where expansion is sought. This includes New England, where the company has two stores, and some big cities. Among the next moves will be an opening in Berlin, Mass., near Boston. And Chicago, the District of Co- lumbia and even New York City could well see Cabela's on the hunt in their outer metro areas at some point. SCT 28 S C T / O c t O b e r 2 0 1 4 r e T a i l i n g T o d a y Burger King is defending a plan to shift its headquarters to Canada in the wake of its $11 billion acquisition of Tim Hortons, saying the move has nothing to do with taxes; Tim Hor- tons' business in Canada will account for the vast majority of the combined company's revenues. On a conference call in September Burger King executives were eager to discuss with analysts and investors the creation of the world's first global quick- service restaurant chain. Instead they found themselves fending off angry ac- cusations that the deal, which will base the combined companies in Canada, is an effort to avoid paying U.S. taxes. Pa- triotic Burger King fans posted messages on the chain's Facebook page asking it not to move its headquarters. U.S. lawmakers, too, decried the merger and vowed to introduce anti- inversion legislation to block the deal or prevent such deals in the future. (An inversion is when a U.S. firm relocates its base to a country with lower taxes by merging with an entity based in that country.) Burger King executives deny that trimming taxes was a factor. "We are going to continue to pay U.S. taxes as we have been doing," said Burger King CEO Daniel Schwartz, who will also be chief executive of the combined companies. He said that Tim Hortons' Canadian tax rate is in the mid-20s in percentage terms, comparable to Burger King's "blended" global tax rate, includ- ing U.S. taxes, which is also in the mid- 20s. "When we look at the combined company, we don't expect there to be meaningful lower or higher tax rates than we had before," Schwartz said. Tim Hortons, known for its coffee and doughnuts, and Burger King agreed this week to merge. The combined com- panies' global headquarters will be in Tim Hortons' hometown of Oakville, Ontario. Burger King will continue to operate out of its Miami headquarters. The two combined will operate some 18,000 restaurants across 100 countries and generate about $23 billion in rev- enue yearly, ahead of chief Burger King rival Wendy's, which posts $2.5 billion in revenue across 6,500 stores, and closer to sector behemoth McDonald's, which generates about $28.1 billion an- nually, across 35,000 global sites. Brazilian investment firm 3G Capi- tal, which controls Burger King, will retain a 51 percent stake in the new company. 3G bought Burger King in 2010 and took the company public two years later. Alex Behring, 3G's managing partner, will be the ex- ecutive chairman. "We are creating a global quick-service restaurant power- house," Behring said in a press release. "Our combined size, international footprint and industry-leading growth trajectory will realize the full potential of these two extraordinary businesses." This is not the first time a U.S. firm has tried to expand Tim Hortons. Wendy's bought the chain in 1996 with plans to take it overseas, but then ran into problems with its own business and wound up spinning Tim Hortons back into a separate Canada-based business in 2006. SCT The new king of fast food