Vail Resorts E-commerce Exit Boosted FY15 Retail Margins

Gross margins improved 190 basis points at Vail Resorts Inc. Retail/Rental operation in the year ended July 31 thanks largely to its decision to shutter an e-commerce platform that was dragging down margins.

Vail Resorts Inc. Retail/Rental (VRR) sales  reached $219.2 million during the fiscal year, up $8.8 million, or 4.2 percent,  compared to Fiscal 2014, due to an increase in rental revenue of $5.9 million, or 10.7 percent, and an increase in retail sales of $2.9 million, or 1.8 percent.

The revenue increase was largely driven by stores in Colorado and the addition of the Park City and Perisher resorts, which were partially offset by the absence of sales at 02GearShop.com, which SSI shuttered in January 2014, and declines in sales at stores serving three resorts in the Tahoe region, where ski visits plunged last winter due to the lack of snow.

Park City, which was acquired in September 2014, and Perisher, an Australian resort acquired in March of this year, contributed $1.8 million and $1.4 million in incremental revenue respectively, including $1.5 million and $600,000 in incremental retail sales.

VRR gross margin increased to 59.9 percent from 58.0 percent in fiscal 2014, due largely to the closing of the 02GearShop.com which was acquired in July, 2011 to accelerate Vera’s e-commerce efforts and closed three years later.
 
VRR, which does business as SSI Ventures LLC, operates approximately 185 retail and rental locations specializing in sporting goods including ski, snowboard, golf and cycling equipment. In addition to providing a major retail/rental presence at all 11 of Vail Resorts Inc.’s mountain resorts, VRR operates stores throughout the Colorado Front Range and at other Colorado, California and Utah ski resorts, as well as the San Francisco Bay Area, Salt Lake City, Minneapolis and Appleton, Wisconsin.

Vail Resorts is on track to complete by opening day of the upcoming winter season $50 million in improvements at Canyons and Park City that include connecting the resorts to create the largest contiguous ski area in the United States. As of Sept. 20, the company’s season pass sales had increased approximately 16 percent in units and 22 percent in sales dollars compared with Sept. 21, 2014. The figures exclude sales of season passes sold by Perisher.