Retailers reluctance to own inventory has enabled Jarden Outdoor Solutions to pick up shelf space, said Jarden Corp.s Chairman and CEO Martin Franklin. That desire has insulated JAH from the so-called “trade-down effect, in which nervous consumers trade down to lower-priced private labels over brands to save money during an economic downturn. In the current economy, retailers are being more conservative with their private label brands, Martin said.
“When it comes to private label, they own that inventory, and in the branded business, they don't,” said Franklin, noting that Coleman flashlights are among Jarden Outdoors new products that have gained shelf space recently. Franklin made his remarks after Jarden announced its Outdoor Solutions unit reported organic revenue growth of 3.8% in the first quarter, historically the units biggest.
The Outdoor Solutions unit generated operating earnings of $37.0 million on net sales of $658.3 million, up 68.2% from $22.0 million on $212.9 million in net sales in the first quarter a year earlier. After adjusting for the addition of Pure Fishing and K2 Inc., which Jarden acquired in April and August of last year respectively, unit revenues grew 3.6% on a pro forma basis. Four of Outdoor Solutions five divisions reported organic growth during the quarter, with particularly strong results at Coleman Fishing, Marmot Ski and Rawlings, as the businesses shipped to load stores for the key spring season or to meet fill-in orders for winter apparel.
Vice Chairman and CFO Ian Ashkin said Jarden still has adequate liquidity to make tuck-in acquisitions should the current economic slowdown present any opportunities.