A dramatic increase in gross margins for area ski shops
led to the best net operating profit in the past 10 years, while a decline
of gross margins in non-area shops led to lower profits, according to the
new Cost of Doing Business Survey being published by the National Ski &
Snowboard Retailers Association (NSSRA).
In 2003, area shops had a gross margin on merchandise sales of 56.3% versus
45.7% in the 2001 survey, and a less than one percent increase in total
operating expenses (43.5% versus 42.6%) from 2001. The result was that net
operating profit almost doubled, to 10.1% in 2003 versus 5.7% in 2001.
In 2003, non-area shops had a gross margin on merchandise sales of 39.3%
versus 42.3% in the 2001 survey. With a three percent decline in margins and
a 2.5% increase in total operating expenses (34.9% versus 32.4%) from 2001,
net operating profit fell sharply in non-area shops, to 3.1% in 2003 versus
10.2% in 2001.
Both non-area and area shops showed improved inventory turns. Non-area shops
improved turns in 2003 to 2.4 times versus 2.0 times in 2001. Area shops had
turns of 2.9 times in 2003 versus 1.8 turns in 1999. (Turns data for 2001
was not available for area shops.) Area shops showed major improvements in
employee productivity, while non-area shops did not.
“The information provides members with benchmarks to pinpoint strengths,
weaknesses and improvement opportunities,” NSSRA President Thomas B. Doyle
said. “Information on gross margins and inventory turnover provide
guidelines for improving profitability.”
Additional information of the survey will be available at the NSSRA booth in
the Lobby Registration area during the SIA Show.
