Memphis and Bass Pro Shops: one expensive fishing expedition.
Don't hold your breath waiting for Bass Pro to come to The Pyramid.
When The Pyramid was built in 1989, it was intended to be a symbol for Memphis on the Mississippi. If all goes well — or not so well depending on your point of view — in 2010 The Pyramid will instead be the largest outdoor billboard in Memphis, with the words "Bass Pro" in 50-to-60-foot letters on all four sides.
A proposed project that moved slowly even before Bass Pro signed a nonbinding letter of intent with Memphis and Shelby County on June 27th could be further delayed by the downturn in the economy, the soaring cost of fuel, and more competition in the crowded hunting and fishing business.
Last year, Gander Mountain, which has the largest retail network of outdoors stores in the country, opened a store near Jackson, Tennessee, just 65 miles from East Memphis. Gander Mountain, a publicly owned company, has seen its stock price slip from $16 a share one year ago to under $5 a share in November. The company lost $13 million in 2006 and says in its annual report, "Our current business strategy that focuses on large-format retail stores has not proven successful on a long-term basis."
The company warned of a downswing in the economy that would curtail discretionary spending on boats, ATVs, firearms, and fishing rods. And that was months before the price of a barrel of oil approached $100. Gander Mountain has a boat partnership with Tracker Marine Group, a division of privately held Bass Pro.
Bass Pro's biggest competitor is Cabela's, a publicly owned company that specializes in catalog sales. Cabela's stock has fallen from $26 to $18 this year. The company earned $86 million on $2.1 billion in revenue in 2006.
Bass Pro pitches its mix of retailing and entertainment, with fancy furnishings, mounted animals, indoor ponds, aquariums, restaurants, and product-demonstration areas. There is a small Bass Pro in Memphis and a much larger one near Jackson, Mississippi, which opened in 2005. And there have been rumors that Cabela's would put a store in Tunica County.
Both Cabela's and Gander Mountain became public companies through initial public offerings of stock (IPOs) in 2004, following 30-40 years of private ownership. The sudden craze for ammo, camo, and IPOs may remind Memphians of another fad 20 years ago. In 1987, the Hard Rock Café was the hottest IPO around and one of the big selling points for, you guessed it, The Pyramid, which somehow never got a Hard Rock.
Robert Lipscomb, chief financial officer for the city of Memphis, has been the city official most closely involved in dealings with Bass Pro. On a scale of one to ten, with ten being certainty, Lipscomb says his confidence level in Bass Pro coming to The Pyramid is nine.
"I want to build some relationships with Bass Pro and St. Jude, FedEx, Graceland, and Ducks Unlimited," says Lipscomb. FedEx, for example, is the carrier for Bass Pro's catalog sales, taking the business from UPS. Lipscomb sees Elvis buffs stretching a one-day or two-day visit to Memphis into three or four days with Bass Pro in the mix.
The proposed financing plan gives Memphians who are not sportsmen little to get excited about. It calls for Memphis to put $30 million in federal new-market tax credits into Pyramid improvements while Bass Pro contributes $45 million. In addition to four giant glass billboards visible for miles on Interstates 40 and 55, Bass Pro gets to lease The Pyramid and a total of 39 acres of surrounding land for 20 years for $1 million a year or 2 percent of gross sales of merchandise and restaurant items, whichever is more. The city and county are responsible for the remaining debt on The Pyramid.
Bass Pro is supposed to make up its mind by January 31, 2008. The company estimates it would take 730 days to complete construction, putting the earliest opening in the spring of 2010. No lease payments are due until then.
Like they say, hunters and fishermen must have a lot of patience.