Gander Mountain's Going Private...Now What?

Outdoor sporting-goods retailer Gander Mountain (GMTN) is going private, a move that isn't often seen in retail nowadays. The Saint Paul, Minn.-based company is offering a one-for-30,000 stock split that will put the less than 300 shareholders in control of the retailer.

The move is strange in that there are a few high-profile chains going public in the industry lately. Vitamin Shoppe (VSI) filed an IPO in October. Deep-discounter Dollar General (DG) and apparel retailer Rue21 (RUE) did the same late last year.

It's interesting, in part, because Gander Mountain's third-quarter financial results proved favorable, as they were during most of the fiscal year, considering the recession. The 116-store retailer reported a $3.2-million income, up from $800,000 during the same year-ago period. Sales at stores open at least a year rose one percent, not a bad increase for this economic environment,

Larger competitor Dick's Sporting Goods (DKS) also performed well during its third quarter. The 420-unit chain recorded a 1.2-percent same-store sales increase and net income was $18.9 million, more than $10 million over it took in during the third quarter of 2008.

Apparently, Gander Mountain isn't happy with too much overseeing by Wall Street. "We believe our status as a public company not only failed to benefit our shareholders materially, but also places an unnecessary financial, management and competitive burden on us," the outfit said in its SEC filing.

The sporting-goods sector of retail is stable in the face of Walmart and other category killers. So we could see some more companies doing this. If stability equals time away from the public sector, then players in the retail industry may go in this direction.