Dive Brief:

• Private equity firm Sycamore Partners has partnered with U.S. credit company Synchrony Financial to bid on outdoor retailer Cabela’s. Meanwhile, rival Bass Pro Shops is working with U.S. bank Capital One Financial Corp., which is interested in Cabela's credit card business World's Foremost Bank, sources told Reuters. The two groups are slated to make offers this week.

• Cabela's investor Elliott Management last year disclosed an 11% stake in Sidney, Nebraska-based Cabela's. The investor is said to be urging a sale or other ways to unlock value in the struggling retailer, including a real estate sale or spinoff of its credit card business. 

• Shares in Cabela’s rose as much as 4.5% late Thursday on the news that the retailer may indeed be sold. Shares were up 2.9% to $53.86 in late trading, giving Cabela’s a market capitalization of $3.7 billion, according to Reuters.

Dive Insight:

For months, privately held Bass Pro Shops — an outdoor retailer quite similar to Cabela’s — has been rumored to be looking into acquiring its rival, working with Goldman Sachs Group’s private equity unit to reach a deal. In addition, the New York Post earlier this summer reported that private equity firms Apax Partners and TPG Capital are each meeting with Cabela’s in pursuit of a possible acquisition. 

Cabela’s has been struggling for some time now, and last year scaled back expansion plans after discovering that its new superstores were taking sales from existing ones. But in its latest earnings report, a sliver of optimism resurfaced. In July, the retailer posted its first quarter of positive comparable store sales since the third quarter of 2013. The increase was "attributable to strength in firearms and shooting related categories as well as the camping, powersports, and fishing categories," according to a company press release.

The fact that Cabela’s is in part a gun retailer (and makes considerable sales from firearms) has emerged as a controversial aspect of its business in light of increasing mass shootings in the U.S. Some private equity firms have balked at gun-related investments. 

Along with the the minority stake held by Elliott, the founding Cabela family still holds a 24% stake in the company, which could complicate how any bids are received. 

Cabela's, founded in 1961 by Dick Cabela, now has some 80 stores in 36 U.S. states and nine in Canada, plus a catalog business that sees 24% of its sales. Springfield, MO-based Bass Pro Shops was founded ten years later by Johnny Morris, who retains a majority stake in the company, and runs about 100 stores in North America.