The retail environment seems to be quite healthy for many of the major outdoor specialty chains, although the competitive environment is heating up at the same time. Brick and mortar retailers who are successfully integrating the Internet and catalog sales into their overall strategy seem to be driving most of the success, while Internet-only retailers are seeing continued strong growth.
L.L. Bean reported an 8.5% increase in sales for fiscal 2004, from $1.30 billion for fiscal 2003 to $1.41 billion for the prior year. The company also posted a 7% comparable store sales increase. L.L. Bean spokesperson Rich Donaldson told BOSS that Internet demand was up 22% in 2004 versus last year. Traditional catalog sales continue to be the dominant channel for the retailer, though current trends suggest that e-commerce will likely surpass catalog/phone/mail orders within the next couple of years.
REI was also able to leverage its multi-channel approach. The retailers fiscal 2004 sales increased 10.2%, from $805 million to $887 million, while 2004 operating income increased from $56 million to $72 million. Net income increased 32.5% to $25.3 million compared to 2003s net income of $19.1 million.
Comp store sales increased 5.3% versus on top of a 2.9% increase in 2003. Direct Sales – internet, catalog, and mail order – increased by 11.3% led by online sales growth from REI.com and REI-OUTLET.com.
Based on 2004 results, the outdoor retailer also increased its financial support of environmental stewardship efforts to $2.5 million for 2005. REI announced a $44 million member refund to its active members.
REI added seven new retail stores in 2004, and its newly remodeled Portland store received a Leadership in Energy and Environmental Design for Commercial Interiors Gold Rating, making it the first retail store in the U.S. to achieve this standard.
In the e-commerce world, Backcountry.com is also showing some very positive sales results for 2004. The company successfully launched separate ski-only and snowboard-only retail websites in 2004, both selling full-price merchandise. The on-line retail company has also launched a single item per day closeout retail site called steepandcheap.com to compliment its existing closeout site, backcountryoutlet.com. All of this action boosted sales by 84% during 2004 to roughly $27 million, and the company reported record breaking single day sales, monthly sales and record single day shipments.