Fear about economic security kept consumers, retailers and suppliers in a cautious mood this season, reported the SIA. The impact of the economic downturn on the snow sports market was unprecedented. Analysis of historical data reveals that less severe economic events in the past have had little impact on the snow sports marketplace.
However, significant reductions in wealth and job insecurity at the highest levels resulting from this particular economic downturn predicated a downward shift in consumer spending even in the highest income demographics. The peculiarities of this recession resulted in strangled credit markets, higher costs and reduced sales in the snow sports market that had significant negative impacts on both retailers and suppliers.
Additionally, first indications of pre-season order activity for next season suggest that retailers are not betting heavily on increased sales for the 2009/10 season. As a result of this seasons lackluster results, we anticipate some consolidation of retail shops, reduction in chain store fronts, and consolidation of brands.
“We saw some growth in our sales this season but were having some trouble with past due receivables and pre-season orders are smaller than usual. We are planning on some mid-season orders next season if snowfall is good,” said Ben Anderson, Founder, Icelantic Boards.
Overall, the snow sports market sales declined 5% in dollars and 3% in units for the 2008/09 season. This season brought a total of $2.82 billion compared to last seasons $2.95 billion in sales. Current season equipment took the heaviest blow, 75,000 fewer alpine skis, 8,000 fewer Nordic skis, and 34,000 fewer snowboards sold this season. Carryover equipment sold well as retailers discounted prices and cut
margins to the bone to bring in customers and move inventories.
Apparel sales illustrate retailers' discounting strategies; unit sales increased by 2% while dollar sales decreased almost 6% this season.
Participants bought plenty of hats, gloves, helmets and wax before they hit the slopes at local resorts and accessories sales were close to even with last season. If there was a bright spot in this difficult season it was the Internet channel, it broadened while Specialty shop and chain store sales declined significantly.
“The end of the season was soft for us. Our focus was reducing inventory levels to get in a good position for next year. We also concentrated on delivering customer service and quality to the
customers that we did have. Guests were buying the basics; just what they needed and little else. We werent on fire sale; we just worked hard on servicing our loyal guests. We have found that people are willing to spend more for added value, service, convenience and expertise,” said Derek Johnson, Managing Director, Aspen Skiing Company.
Current season equipment sales declined 12% compared to last season and by March 31, inventories of unsold equipment had swelled almost 19% in dollars and 12% in units compared to end of season inventories last year. Retailers slashed prices on equipment to bring customers in and move inventory.
In fact, consumers purchased more than 1/5 all alpine skis and snowboards sold this season at prices that were even with or below the average retail cost. Margins in specialty shops were slimmer across all
categories this season and average costs increased more than 10% across the board.
“Overall, we did great on selling stuff; we just didnt make enough money on it. Some retailers over bought, then panicked and put stuff on sale early. That was one of the problems. In March, we just ran out of customers. We did do well with selling median priced items like Burton and Rome boards, boots and bindings,” said Bill Langlands, Owner, Darkside Snowboards.
All Channels, All Categories Carryover Sales Not Included |
Units Sold |
Average Retail |
Dollars Sold |
YTD Change 2007/08 to 2008/09 |
Chain |
Equipment |
-158,207 |
($3.88) |
($23,331,119) |
Apparel |
-19,599 |
($1.85) |
($6,846,561) |
Accessories |
-124,735 |
($0.25) |
($4,985,669) |
All Products |
-302,541 |
($1.88) |
($35,163,349) |
Specialty |
Equipment |
-180,251 |
($3.03) |
($43,242,759) |
Apparel |
-215,414 |
($7.71) |
($65,507,619) |
Accessories |
-1,632,022 |
$0.61 |
($37,362,729) |
All Products |
-2,027,687 |
($0.63) |
($146,113,106) |
Internet |
Equipment |
76,509 |
($10.35) |
$10,548,143 |
Apparel |
428,185 |
($18.84) |
$9,437,416 |
Accessories |
561,078 |
($1.76) |
$19,530,966 |
All Products |
1,065,772 |
($10.59) |
$39,516,525 |
All Stores |
-1,264,456 |
($1.48) |
($141,759,930) |
