With the majority of the pre-season orders finalized for the 2007 paddlesports business, most manufacturers are seeing a relatively healthy industry with newcomers flocking to the entry level boats. However, this may be impacting some of the premium product as many beginners are using their boats for garage decoration rather than finding the time to get out on the water.
“You know, its funny, weve been hearing a lot in the industry and we have a lot of issues we need to overcome, but at the same time, its pretty apparent that our retailers really support what we do. Weve got good products, they sell through, and they make great margins,” said Woolsey. “Even though we made it tough on them at times during our history, the bottom line is that it still works for everybody.”
Woolsey pointed to some exceptionally strong pre-season numbers as proof of this. He said that Confluence has had a strong pre-season from all its brands with overall bookings up by 50% over last year. Woolsey highlighted the Perception and Harmony brands which had exceptionally strong pre-season as and were two brands that they have been hard at work overhauling; Perceptions pre-season business has doubled and Confluences Harmony accessories pre-season business has tripled.
In fact, Woolsey said that their pre-season has been so strong that the company is investing in expanding its manufacturing capacity with a new roto-mold machine that should increase annual production by over 20%. “Were referring to the new machine internally as the T-2. In addition to the costs associated with the machine itself, we are also adding new mold preparation, some additional maintenance to the facility its a major endeavor to embark on,” said Woolsey. “Were not just making money, were spending money.”
Confluence is also 90% of the way completed with their new distribution facility. The company hired a consulting firm to analyze their distribution process and they put in a new state-of-the-art “pod” system to increase efficiency and insure a higher percentage of on-time deliveries.
Johnson Outdoors is also seeing some progress with new product driving growth. While the company didnt comment on pre-season orders specifically, a Johnson Outdoors spokesperson said that for the paddlesports industry, kayak fishing is trending upward, as well as recreational kayaks and canoes. Johnson Outdoors is also seeing some success with its womens specific models across all brands.
Nikki Reckman, sales manager for Esquif Canoes, said that they have also been seeing considerable increases in pre-season orders. While the company has yet to finalize all of their orders for the season, Reckman said that they have picked up so many new dealers already that she is sure the company is gaining some market share.
Regionally, the Northeast seems to be driving much of the growth a Johnson Outdoors spokesperson said that this is due to the populations close proximity to water, with 98% of paddlers in the area living within five miles of paddling. The Midwest is also benefiting from increasing popularity in kayak fishing. The Pacific Northwest is right behind the Northeast, with strong growth throughout the region, particularly in coastal areas. In addition, kayak fishing, coupled with a relatively benign hurricane season has helped gulf-coast outfitters and paddle-sports retailers expand their businesses considerably compared to last year.
Retailers are seeing revenue and sales growth, but a higher cost of inventory is making them tell a bit of a different story on pre-season orders. John Durrua and Rich Hague of Jersey Paddler said that their pre-season orders were on-par to slightly below last year, depending on the category. “Inventories are okay we probably have a few boats more than we would like, but not anything we cant handle. Accessories are in good shape, so I feel confident moving forward with our pre-season there,” said Durrua.
The Jersey Paddler is seeing most of their sales volume coming from entry-level to intermediate paddlers, with strength in sit-on-tops due to their close proximity to the shore.
In the Midwest, Rutabaga is seeing high gas prices drive people into paddlesports for nearly any type of water-based activity. The same trend is also increasing sales of transportation solutions like car racks and trailers. With fishing boat motors only averaging 2-4 MPG, many people are shifting to human powered boats. Looking at pre-season orders, Jeff Weideman, co-owner of Rutabaga, said that his shop will be reducing their pre-season orders because they shifted their business model this year to work on a “just in time” inventory plan. “The only pre-season orders we are placing this year are for delivery on February 15th, after that, nothing is firm,” he said. “We would trade margin for turn any day. With interest rates rising, it is getting harder and harder to finance inventories. There are a lot of great products out there, the manufacturers who can handle just in time orders are the ones who will win.”
Other retailers are moving towards similar models, although there will always be a push-pull relationship between vendors, who want to plan out their entire year before starting production, and retailers who want to wait and see what sells before committing to inventory.
