Challenging, rocky, mixed bag, and right-sizing. Those are some of the descriptors snow executives used to describe business currently as brands, retailers, and resorts try to match the strong numbers posted during the pandemic.
“I don’t think it’s been a secret that the weather’s been challenging in both directions,” said Adrienne Isaac, director of marketing and communications for the National Ski Areas Association. “Out in the east, it’s been a little bit of a slower start and then out west, there’s been a ton of snow, which can make travel or skiing hard. But, in spite of that, people are still going to the resorts.”
Empire and Burton stores in Bromont, Quebec – Photo courtesy of Empire
In fact, Nicolas Dubuc, owner of three Empire Sports stores in Quebec, said he’s coming out of holiday with low inventory, due to a sales surge.
He noted brands such as Vans, The North Face, Salomon, Capita and Union as standout performers so far this season, with higher-end items from Burton AK and splitboarding gear also selling well.
Dubuc said he’s an optimist when it comes to his outlook for the season, pointing out his stores’ sales have continued to increase from the start of the pandemic.
Arcade Belts at Evo Salt Lake City – Photo by The Daily
Others believe the pandemic boom years may be giving way to new business conditions. Call it stability, or what Arcade Belt Co. co-founder and CEO Tristan Queen described as a balancing of the scales.
“There is, without question, a right-sizing happening and there’s a cautious approach to how everyone’s measuring their business – retailers and brands alike – in that inventory and consumer spending are without a doubt the first two topics that everyone’s talking about right now,” the CEO said.
Queen added “the bottom isn’t dropping out at the point-of-sale” as resorts see visitors, pass sales, and spending continuing.
“People are getting out there,” Queen said. “I think there’s just a concern that nobody wants to get out ahead of themselves. It’s challenging to come back from such an upward trajectory. Anytime that pace starts to slow down, it’s challenging and comping is harder.”
For Arcade, an accessories brand, Queen’s projecting orders to be about flat for fall and winter 2023.
Jeff Brusven, North America director of snow sales at Boardriders, whose Roxy, Quiksilver and DC brands operate in the snow market, noted differences in the retail channels.
“I’d characterize it as uneven, a little bit of a mixed bag in terms of results,” Brusven said. “Certain channels have done really well, especially the specialty snow channel for ski and snowboard seems to be thriving, while some of the e-commerce wholesalers had a little bit tougher time.”
Brusven guessed that consumers were cooped up for so long during the pandemic and ordering online, that they’re now favoring in-store experiences and face-to-face interactions with salespeople.
Orders for next season, he said, are coming in flat to down roughly 5%, with no real difference in demand across the channels.
Buyer Strategies, Retail Promotions
The sentiments are largely the same among retailers: There were weather concerns at the start of the season, some pick up, and businesses are currently operating with a level of caution.
Mt. Bachelor in Bend, Oregon – Photo courtesy of Alterra Mountain Co.
Reese Thedford, director of sales at Mt. Bachelor, described the past few months as a bit of a rollercoaster.
“It was somewhat of a nervous start, just with economic factors and then with the amount of catch-up inventory. Our suppliers weren’t able to provide for so long (during the pandemic) and then all of a sudden you’re getting everything all at once,” Thedford said. “So, (lots of inventory) at the start of the season and then we were concerned about sell-through. Now that we’re through a couple months of the season, we’re feeling pretty good and actually seeing growth in both sales revenue and volume, which seemed a daunting task to pull off six weeks or so ago.”
Boot sales have “skyrocketed,” he said, but it’s been a “little bit of a rockier road in skis and bindings.” The snowboard business, however, came out of the gate with double-digit increases, Thedford said.
Promotions may have to happen sooner than in the past, but he doesn’t see the need for markdowns just yet.
As for next season, Mt. Bachelor buyers are operating with a more “proven” model mindset for brands based around on-time shipping, demand, tried-and-true colorways, and necessity products, Thedford said.
Christy Sports in Colorado – Photo courtesy of Christy’s
Matt Gold of Christy Sports, which operates more than 60 stores across Colorado, Utah, New Mexico, Montana, and Washington, said the buying team is in the midst of strategizing its buy plan and declined to cite specifics around the categories the company intended to ramp up or slow.
Ultimately, the CEO is generally upbeat about the business, saying Christy’s is projected to end the year up from the prior year, despite it being a “bit of a bumpy season.”
“I think for us, and for operators in the industry that are doing the best, pricing has been a good friend and a good driver,” Gold said. “We have a big services business, led by rental, and some things that we’ve done to strengthen that platform and digitize the whole platform, both online and on mountain, have definitely served us well and allowed us to continue to delight our current customers, attract more, gain some market share, and drive better yield and better productivity.”
Inflation generally has bumped up prices approximately 15%, but if products aren’t fast movers, markdowns end up taking a bite out of higher list prices.
Gold said he doesn’t see having to do anything “dramatic” or “materially different” from pre-pandemic times when it comes to promotional activity.
“I think it’s all relative because for the two pandemic seasons, we basically didn’t go on sale at all,” he said, “And, so, what we’re doing is more akin to a pre-pandemic season.”
Recession?
While business is soft on a comparative basis, industry executives are reporting a mixed signals when it comes to a potential recession.
SIA President Nick Sargent – Photo courtesy of SIA
“We’ve had two record seasons of skier visits and certainly people were out buying the product and loading up their garages and were excited about having all this brand new product,” said Nick Sargent, president of the Snowsports Industry Association. “Then the economy slows down, there’s hints of a recession, hints of change. We’re seeing it right now, all the tech companies laying people off and that does have a ripple effect.”
Still, Sargent said it’s too early to call and suggested the industry might have a better read come March.
Brusven said the conversation around recession is giving some retailers a reason to be cautious, but sales activity in different customer segments offers another perspective.
“What we’re seeing at least in terms of sell-through is that the high-end consumer is not very affected. So, for example, our higher-end products, such as Gore-Tex with Quiksilver and Roxy, have been selling really well and been booking really well for next year,” Brusven said. “When I speak to resorts about their bookings and their season pass sales, the high-end consumer is still flying to resorts across the country, booking expensive week-long trips for their family, and definitely spending money. I think at the entry price barriers there might be a little bit more a concern in terms of those macroeconomic concerns and fears of a recession.”
Several executives pointed to the resilience of snow sports generally, although no one claimed the industry is insulated from a downturn.
Arcade Belt’s Queen is looking at the current operating environment pragmatically, given the pandemic growth of the past few years:
“It’s always hard. Shrinking just never feels good, or not growing. But, to me, it’s not a negative; it’s just the way it is.”
Editor’s Note: For an in-depth look at what brands are selling best this season at Wave Rave in Mammoth, Calif., one of the most high-profile snowboard shops globally, see the story on our sister publication, Shop Eat Surf.
