(This story was updated on 7/28/2023.)
To see what is happening at the retail level, The Daily met with Jim Quinlan, the president and owner of Jax Mercantile Co., which has nine stores in three states.
The stores specialize in outdoor gear, clothing, footwear, farm and ranch supplies, home essentials, gifts, hardware, and military surplus and are a large account for the outdoor industry.
We walked the floor of the company’s Fort Collins Outdoor Gear store with Quinlan, who shared details about current business trends, what brands and categories are working, and future plans for the company.
Hardgoods Challenges Post-Pandemic
JAX Mercantile Co. began as small store founded by Jim’s parents, Marvin and Lola Quinlan, in 1955 in Ames, Iowa.
Like many outdoor retailers, Jax saw incredible demand during the COVID-19 crisis.
“At first things were like ‘Whoa, this is incredible,’ and our volume went through the sky,” Quinlan said.
But now, the Colorado-based retailer is seeing “very soft” sales in many hardgoods categories.
“A lot of these hardlines — people have them. How many kayaks do you need? How many paddleboards?”
As a result, Quinlan said, sales volumes in 2023 are similar to 2019.
“It’s a normalization,” Quinlan said. “But it’s a normalization that gives me some indigestion.”
He expects the company will be feeling the impacts of the hardgoods slowdown for a number of years, until customers need to start replacing what they bought during the pandemic.
“That’s certainly been a struggle and we expect it’s going to be around for a while,” Quinlan added.
Ideally, Jax would sell through everything in its stores within a year.
“But that clearly doesn’t happen,” Quinlan said.
In the first quarter, the company has been putting a lot of items on clearance, because it’s heavy on inventory.
“We’re in this bind where we have so much tied up in inventory right now. We need to liquidate some of the dollars we already have tied up,” Quinlan said.
For example, in the clothing category, the volume of clothing sales is up but margins are down because of markdowns.
The company has seen some success with opportunity buys on marked-down goods from vendors, however, which is also helping to drive sales in stores.
“But I would say clothing is the predominant winner right now for us. Clothing as a category has been doing really well.”
Patagonia and Kuhl are both selling very well.
Some smaller sportswear brands are gaining traction, including Vuori, Cotopaxi, Mountain Hardwear and Carve Designs.
However, customers aren’t exclusively buying athleisure like they did during the pandemic – they are interested in other types of clothing as well.
Women’s apparel sales are up and outselling men’s apparel at some Jax stores.
“Women’s wear is doing better than men’s because women are more fashion conscious,” Quinlan said. “They all want the newest Patagonia vest.”
Several brands are also offering more extended sizes for women.
“There’s a big push in the outdoor industry for inclusion with an emphasis on plus-sizes and women wanting quality gear,” he said.
Another trend Jax is noticing: More brands are using environmentally friendly processes and fabrics.
Footwear has always been the cornerstone of Jax, and the company has long prided itself on carrying a large selection.
The best performing brands of late have been Keen, Hoka, Merrell, On Cloud, and Altra.
Blundstone and Oboz have been selling year-round, and Birkenstock and Chaco were hot sellers in the spring and summer.
Oboz’s new Katabatic mid hiking shoes have been getting strong interest.
Sorel sandals and sneakers are also starting to pick up in sales.
In the flip-flop category, Reef, Teva, and OluKai are doing well.
Wedge and platform sandals are still trending among Jax customers.
But overall, footwear sales have been flat this year.
“We haven’t seen great growth in footwear. That’s been slowing down a bit,” Quinlan said.
Jax has been stocking more athletic footwear lines, as traditional outdoor wear merges a little bit with the athletic side of gear and apparel.
“We’re definitely seeing people merging the old gym look with the outdoor look,” according to Quinlan.
On that note, Hoka’s Bondi and Clifton styles continue to be top-sellers.
And when it comes to socks, Smartwool has been a top performer.
“How often are you going to buy a new bike?” Quinlan asked. “I’m still riding the bike that was new 20 years ago.”
However, innovative products such as e-bikes and e-scooters are still in high demand, he said.
The growth in popularity of the indoor climbing gym has brought more people into the sport who are moving on to outdoor climbing, especially in the younger generation.
They start with harnesses and climbing shoes, then need more technical equipment such as belay devices and ropes as well as pads for bouldering.
The great snow season in the Rockies this year means there should be a lot of opportunities for kayaking when the snow melts.
Sales of stand-up paddleboards, however, seemed to have peaked.
Quinlan said that segment has reached saturation.
“There are just so many,” he added. “You go out to a lake now and you can almost walk across everybody’s paddleboards.”
The overland category has reinvigorated equipment sales, according to Quinlan, giving a boost to solar-powered gear, cookware, camping furniture and electric refrigerators.
“That market’s really growing a lot,” he added.
The Mystery Ranch brand has been gaining some market share.
Also, ultralight packs using Dyneema fabric are important to consumers who are through-hiking on the Appalachian Trail, the Pacific Crest Trail, and the Colorado Trail.
That fabric isn’t as common as nylon, for example. Brands to watch in this space are Gossamer Gear and Hyperlite Mountain Gear, Quinlan said.
The plus-size and universal trend is also popular in the packs segment. Gregory and Osprey are two brands highlighting this trend.
More and more companies are also seeking out bluesign certification, which takes into account the product’s impact on the environment and the health and safety of the workers who made the materials.
Stanley, Hydro Flask, and Yeti all continue to sell well.
As far as brands that are new to Jax, Cotopaxi stands out as a fun, colorful brand that people love, according to Quinlan.
Jax’s Future Plans
The company is still hyper focused on its brick-and mortar business but doesn’t have any immediate plans to expand its store count. E-commerce is not a large part of the company’s strategy at this point.
Quinlan has seen an “incredible” number of brick-and-mortar stores closing lately, and Jax takes advantage of those store closures to stockpile fixtures.
The company could open another store or two with the fixtures it has in storage.
“We can open stores for a lot less than a lot of people because we can reuse, reduce, recycle,” Quinlan said.
If Jax does add more stores, it would be within an hour or two from Fort Collins.
“The further we get out, the more difficult it is to get our buyers into the store frequently,” Quinlan said.
Bart Schaneman can be reached at firstname.lastname@example.org.