Late Snow Prompts Chain Stores to Discount Deeply in March

 

The data shows year-over-year percentage growth in chain store Snow Sports sales slowed to the mid-single-digits in the five week retail fiscal month of March from the high-single-digit trend seen in February. 

 

Average selling prices (ASPs) also rose less dramatically, settling down to low double-digit gains from double-digit gains reported in February. In Alpine skiing, ASPs declined for apparel, skis, boots, bindings and poles. In Snowboarding, ASPs declined for apparel and boards.

“In the Northwest we got snow, we got record snow,” said Ron Merconi, vice president and general merchandising manager for Joe’s Sports. “The problem is it all came late. November and December were a bust, especially compared to the year before. Our inventories are closer in line, but margins were not where they needed to be.”
Sales growth was driven by Accessories and to a lesser degree, Snowboards. Alpine and Cross Country were both down for the month, while Tobbagons/Sleds sales grew at a healthy pace.

In Alpine, System sales were the exception. Sales increased in the mid-teens, while ASPs rose in the mid-single-digits. In Snowboards, bindings sales increased in the mid-single-digits, but those sales were more than offset by a low-single-digits decline in Boots and just below flat Board sales. ASPs for the overall Snowboards category declined in the low-singles as ASPs for Boards declined mid-teens, suggesting end-of-season clearance sales.

The lower ASPs indicate chain stores are still sitting on significant inventory that could hurt early season pricing next fall, said John O’Connor, national sales manager for K2 Boarding. He said his research indicated that specialty retailers ended the month and season with much cleaner inventories.

“I don’t think many people got on the hill a year ago,” he said. “And the people who got on the hill a year ago were real enthusiasts, and they came back this year and bought from the board shops. The general sporting goods person did not, and now the costs of getting up to mountain has become more of an issue.”

Anxieties over gas prices and the economy also spilled into the specialty channel in some parts of the country. In Vermont, sales at the ski shop at the Bromley ski resort will probably be up 20% for the year, but that’s off a very week season last year and not as high as manager Gary Bokenkamp expected given dramatically better snow conditions. 

“This winter started out good,” Bokenkamp said. “But here after Christmas vacation everyone zipped up there wallet in terms of big purchases. During the February vacation weekend I had 60 demos out and only sold one pair of skis. I would have thought we would have sold at least 20.”

Bokenkamp said January and February were “really bad,” but sales improved in March as cold weather prompted skiers to buy accessories. Bromley had skis marked down 40% by March.

If business at Black Diamond is any indication, specialty stores catering to backcountry enthusiasts fared significantly better. Snow conditions prompted skiers to replace or add safety equipment and bring friends into the sport. January through March sales grew 20% to 40%, led by telemark and alpine touring bindings and lower priced accessories like skins and poles, said Chris Grover, vice president of sales and marketing for Black Diamond.

 

In March, the strongest gains were in smaller ticket items, such as ski accessories, shovels and probes. Discounts were less prevalent than March 2007, which ended one of the driest and warmest winters in a century. Grover described BD’s pre-season orders for this fall as the strongest in his 16 years at the company.

Goggle and helmet sales lead accessories growth

Accessories sales were a bright spot at chain stores, where they posted another month of strong double-digits sales and ASP growth. Goggles and Helmets drove sales. Bags were up mid-singles, but Wax/Tuning Equipment sales were down. Winter Headwear sales increased in the strong double-digits led by Beanies, though Winter Headbands also sold well. Sales of Ski/Snowboard gloves increased in the strong double-digits, but at a 20% lower ASP.

Apparel markdowns steep 

In apparel, sales were strongest in the Ski category, where sales climbed at a double-digit rate over March 2007. Snowboard Apparel sales increased in the mid-singles in dollars. However, both categories saw steep declines in average selling price as retailers looked to clear out the last of the winter goods in a softening economy before the changeover to spring floor sets.

 

K2’s O’Connor attributed strong apparel sales to skiers updating their wardrobes amid a renewed interest in fashion in outerwear pieces.

However, retailers still seem conservative looking ahead.

 

“Because of the late season, we were not as profitable, so we are going into next fall fairly conservative,” said Joe’s Merconi. “We were fairly aggressive going into this year and ended up having to mark it down, so we will be conservative going into next year and will order as we can.”