Notice of Annual Meeting
Join us at the NSSRA Annual Meeting, which will take place at 5:30 p.m. on Friday, January 28, the second day of the SIA Show in Denver, in the Colorado Convention Center. We will be meeting in Room 501. Refreshments will be served after the meeting. Enter time/place in your planner and be part of the dialogue on the issues important to our success in the snowsports industry. If you are unable to attend the Annual Meeting, stop by and visit us at Booth 4577, in Alpine Hardgoods toward the front of the hall. Look for NSSRA opposite the Dalbello booth.
|NSSRA Chairman Paul Prutzman |
The Holidays have passed, and most uncharacteristically we had lots of snow and a shortage of inventory. While the shortages may be frustrating, I think it may be better for the long term financial health of the industry than having massive closeouts hunting for homes. Customers, retailers, and manufacturers will have to recalibrate their buying and selling practices, but it should help to improve margins and limit the blowouts of overstocked inventory. Let's all just try not to overreact in the next order cycle.
We (myself, Past Chairman Brad Nelson and President Larry Weindruch) had a congenial and constructive meeting with SIA's Dave Ingemie last November. While we represent the two different sides of the merchandise supply process, there is a strongly shared belief that a healthy specialty retailer community is vital to the health of the snowsports industry.
We noted that Internet sales are still growing and a concern in many minds (See Brad Nelson's article later in this newsletter). Unanswered questions arise about where some of the unconventional online retailers who focus on special discounts and off-price merchandise are getting their supplies. Unfortunately we had to agree that, while we should pay attention to our suppliers' practices, expecting that the flow of goods will stop is wishful thinking.
Dave suggested that we could benefit more by focusing on positive actions we can take rather than wasting time worrying about what others are doing. He briefed us on "Project Connection" that SIA is piloting with several retailers and ski manufacturers. The goal is to increase the turnover of equipment in customers' hands through targeted informed communication, based on data already in our possession.
If the pilot proves effective, we can expect SIA to work with retailers to roll it out, and NSSRA will be there to help you get on board. We may be that unique retail segment that can only get 1.02 inventory turns a year, but if we can get skiers to refresh their equipment inventory a bit more often (currently believed to be about 10 years for skis and seven years for boots), we and the manufacturers can celebrate together.
Overall, we had a very good session with Dave, and I left the meeting feeling that both SIA and NSSRA will benefit from improved and more frequent open communications.
In December, we instituted a new communications channel for the NSSRA Board with our first quarterly conference call. The call was well attended and provided a needed opportunity for discussion as we work to make NSSRA a more active and vital force in the Snowsports industry.
In the past we have depended on our Annual Meeting and sporadic e-mails to move NSSRA's interests forward. Going forward, we felt that approach can be far outpaced by events and the desire to take a more proactive stance on issues and advocacy. Communications to the retail community will be key, and we need to ensure that the Board, as the governing body of NSSRA, is informed.
The first initiative to gain the backing of the Board is an outreach to the other stakeholders in our industry (resorts/ski areas and suppliers/manufacturers) with the goal of cooperation in efforts to grow the sport. In furtherance of this objective please consider attending the Friday morning breakfast SIA is hosting in Denver for retailers, areas and manufacturers to share ideas for promoting and growing snowsports together. You should have received your invitation from SIA and RSVP'd by now. I hope to see you there.
I also recommend you check the schedule of seminars in Denver. I know we're booked with appointments, but there are some very relevant topics that deserve your consideration. Go to the SIA website: http://siasnowshow.snowsports.org/ShowInformation/SeminarsClinics/
See you there. -- Paul Prutzman, NSSRA Chairman
|Profitability Improves in Ski Shops, According to New NSSRA Cost of Doing Business Survey|
In several key measures, profitability increased in 2009 for specialty ski shops, according to the new Cost of Doing Business published by NSSRA.
Non-area shops saw net profit before taxes to total revenue improve to 4.2% from 2.1% two years ago. Area Shops saw an even bigger increase, 9.2% versus 3.1% two years ago.
In another key measure of profitability - net profit before taxes to total assets - non-area shops showed a slight improvement, 5.4% from 4.4% two years ago. Area shops, however, jumped from 4.1% two years ago to 7.5% in the current study.
In a key productivity measure, total revenues per selling square foot, non-area shops slipped to $210 versus $280 two years ago. Area shops showed a healthy improvement with sales of $420 versus $329 two years ago.
The report provides segmentation by sales volume, by area versus non-area shops, by shop square footage, by single- versus multi-shop operations and by high profitability shops.
In addition to balance sheet and income statement data, the report provides measures of profitability, inventory productivity, space productivity, asset productivity, personnel productivity and financial management leverage.
The 43-page report provides benchmarks to pinpoint strengths, weaknesses and improvement opportunities. Information on gross margins and inventory turnover provide guidelines for improving profitability.
The new NSSRA Cost of Doing Business Survey will be sent to members. Non-members may purchase the survey for $150. Contact NSSRA at 847-391-9825 or firstname.lastname@example.org.
JOIN NSSRA AT SIA SHOW AND SAVE!
Non-members who join NSSRA at the SIA Show will start saving immediately. If you join at the show or by February 15, you can save $30 off the regular annual dues, and your membership will run through March 31, 2012. Just stop by Booth #4577 and pick up the special application form exclusively for SIA Show attendees.
Offer Expires: February 15, 2011
|Compatible Versus Predatory Channels of Distribution |
(The following article was written by NSSRA Past Chairman Brad Nelson, Hi-Tempo, Inc. It represents his opinion on an important issue that impacts every specialty snowsports retailer. )
At the end of the Second World War, when the ski industry was in its infancy, the specialty ski retailer was the only channel of distribution between the manufacturer and the consumer. As the industry grew so did the channels of distribution. The direct to consumer channel developed as the pro form phenomenon developed. The chain store channel started with department stores and then chain sporting goods stores. And today, of course, there is the Internet channel.
While this is in no way a definitive list of the various channels of distribution in the snowsports industry, it is clear that we have gone from a single channel of distribution at the start of the industry to many.
So is this a good thing or a bad thing?
The answer is both. It's a good thing when the channels are compatible with one another, a bad thing when the channels are predatory.
In the early days of the ski industry, channels of distribution developed that were compatible, meaning that as they grew, it was not at the expense of the other channels. Sure, specialty retailers weren't all that excited that department stores and chain stores were selling the same brands as specialty, but eventually the two channels figured out what they were good at and they were able to coexist. They both added value to the consumer and were rewarded for it.
In my view, most retailers would categorize vendor direct sales as predatory. When retailers choose a brand, they are telling their marketplace that they believe in the brand so much that they are willing to bet their businesses on it. They are willing to invest in it, market it, advertise it and service it. I strongly believe that when a brand that has partnered with retailers decides to compete with them for the same customers, it becomes worse than a competitor, it becomes a predator.
Vendors are certainly free to sell their products through whatever channel of distribution they'd like. That changes, though, when a vendor chooses to distribute its products through specialty retailers. When a vendor chooses specialty, it is choosing to partner with businesses that have unique and different cost structures that other channels don't have, such as training costs, service department costs, local marketing costs, and costs for prime retail locations. These are costs that add value to the experience specialty retailers provide to consumers. They are costs that other channels of distribution don't always have to bear.
In my view, using an overwhelming cost advantage to sell direct to the same consumers specialty retailers sell to, is predatory, as are dumping the same product -- that retailers have bought at regular price -- outside the snowsports industry through promotional e-commerce sites; selling direct to pros instead of developing pro form programs that work through specialty retailers; and selling direct to consumers that call themselves "pros" through e-commerce sites.
It's my opinion that selling any product through a channel that does not service that product is predatory, because one channel is being supported at the expense of the other.
Most of the vendors in the snowsport industry have clearly chosen their partners. They are dedicated to the channels of distribution that support the growth of our industry. For some vendors though, it is time to make a choice.
And for specialty retailers, it's time for our voices to be heard. - Brad Nelson, NSSRA Past Chairman
|Snowsports Sales Surge in November|
The snowsports market reached $1 billion in sales August through November, 14% above last season, setting a new benchmark for early season sales according to the SIA RetailTRAK conducted by the Leisure Trends Group. Equipment sales are leading the charge with a 22% increase in dollars sold overall and 13% more units sold. Alpine equipment sales are up 23% season-to-date, and snowboard equipment sales are enjoying an excellent recovery with 20% more dollars sold through November compared to last season's disappointing numbers. Apparel sales are strong in the early season increasing 9% in dollars sold despite a warmer than average October.
La Niņa conditions really took hold in November bringing in more seasonal snow sports weather and sales. Accessories sales increased more than 16% led by very strong surges in goggles, wax, snowboard accessories and backcountry accessories. Overall, the market is on track to set new benchmarks in dollars sold due to snowy weather brought by La Niņa, increased consumer confidence in the snow sports demographic, and snow sports enthusiasts who are ready for new equipment and excellent snow conditions.
Early Season Trends
· 56,345 Alpine ski systems with waists 70-79mm were sold by November 30, a 43% increase in units sold
· AT/Randonee equipment sales are up more than 70% overall led by boot sales that increased 122% to $3.4 million in sales
· Reverse camber snowboard sales are up 60% in units and reverse camber ski sales are up 130% to more than 18,600 units sold season to-date
· Snowboard sales are up 13% in units and 19% in dollars sold, a solid turnaround from last season's relatively dismal sales
· Telemark equipment was the only equipment category in the red through November losing 12% in dollars and 18% in units sold
· Snowboard apparel tops up 19% in dollars sold
· Glove sales increased 26% in dollars and 24% in units sold
· Goggles sales surged up 46% in units sold to 360,000 pairs
· Carryover sales are down 14% overall in specialty
Regionally, heavy early snow, or perhaps, the promise of snow brought consumers out to buy in the Western region where sales were up 30% in dollars. The Northeast enjoyed increases of 5% in units and 10% in dollars after two seasons of decline. Unexpectedly, the South also enjoyed sales increases after last year's stellar sales. Growth in the Midwest region was steady with a 6% increase in units and 9% growth in dollars on very strong equipment sales, which were up 23% in dollars sold.
The RetailTRAK data is gathered directly from the Point of Sale systems of about 1/3 of the snow sports retailers in the U.S. market. For more information about SIA's RetailTRAK information please contact Kelly Davis, SIA's Director of Research at KDavis@snowsports.org.
|In Case There Is Any Confusion|
Earlier in the season, we received a note from Fischer regarding some confusion about its indemnified bindings.
"It seems there were some Colorado specialty retailers who were confused by Fischer's listing of indemnified bindings in the 2010-11 Combined Indemnified Bindings List. The dealer turned away a consumer with an 08-09 binding, telling him that the shop could no longer work on it because it wasn't on the list. We have stated under "older models" that any Fischer branded binding made by Tyrolia is indemnified. If you wouldn't mind, could you please inform your retailer database, clarifying this point."
Consider it done!