MUNICH — When the going gets tough, the tough go camping.
That’s the belief of Europe’s sporting goods industry, which saw sales inch up 1.4 percent last year thanks to a great snow season, plus more people holidaying near home.
Business, including apparel and equipment, topped 37.5 billion euros, or $55.18 billion at average exchange rates, according to the European Federation of Sporting Goods Retailers, or FEDAS.
While traffic at this year’s International Trade Fair for Sports Equipment and Fashion, or ISPO, declined 6 percent versus last year, impacted by snow-stranded visitors in London plus a public transport strike here, the industry’s mood is largely optimistic. Some 60,000 visitors and almost 2,000 exhibitors attended the show earlier this month.
“Everybody is talking about the economic crisis and at some stage, sporting goods retailers will be affected, but we are much more affected by the weather,” Wolfgang Schnellbügel, chief executive officer of Sport 2000, declared during a forum chaired by the World Federation of the Sporting Goods Industry. Sales in each of the chain’s 3,500 stores jumped an average of 14.1 percent in January, Schnellbügel reported.
“The outdoor industry is very recession-resilient. Many of the activities — climbing, walking, hiking or camping — are free,” said Jonathan Petty, U.K. sales manager for Patagonia.
“In recessions, people become more discerning. [Outerwear] is a very considered purchase. They won’t buy rubbish,” added Sharon Campbell, buying director for 17-store U.K. outdoor and mountain sports specialist Snow & Rock.
Retailers were cautious nonetheless.
“We need to separate the actual from the future,” advised Franz Julien, chief executive officer of Intersport, whose European sales grew between 5 and 6 percent to 9 billion euros, or $13.24 billion in 2008, boosted by strong sales of winter apparel.
“Even if the season has been good, with great snowfall, everybody is being prudent with spending and are buying fewer brands,” said Annie Bourgade, Intersport’s head buyer for outdoor and skiwear, which generates around 10 percent of the chain’s sales.
Wrestling with “the widely held perspective that all’s cool because there is snow in the hills and consumers are still spending,” Kevin Myette, head of product integrity at U.S. outdoor retailer REI, warned that everyone will eventually suffer from the impact of the global slowdown on suppliers.
“Factories are feeling the pressure from rapidly reduced orders and forecasts from other parts of the planet: The textile supply chain sputters,” Myette said. “After all, it is but one world, one supply chain and just because there remains consumer demand in Germany, it doesn’t mean the value chain is healthy.”
The U.K. is a case in point. The weak British pound plus increased manufacturing costs in China mean retailers there were facing price hikes of 30 percent at ISPO. “Our consumers are not going to spend 30 percent more in a recession,” said Snow & Rock’s Campbell.
With the pound reaching parity against the euro, European resorts reliant on British visitors may face difficult times. “Chalets in British resorts are going to go bust,” predicted Campbell. “I’ve heard they’re [Brits] taking out tins of baked beans. They’re not out in the restaurants, and the lift passes cost a fortune.”
Independent stores are particularly vulnerable.
“We will start to see it. It’s our potential customers who are losing their jobs,” predicted Fabienne Genoud, owner of Olympia Sport in the resort of Zinal, Switzerland, who trimmed her budget despite “a record year.”
Fellow independent Francis Decroocq, who runs two Sport’s House boutiques in the Swiss ski resort of Villars, will likewise carry fewer brands to concentrate on globally recognized names like Moncler, Bogner and Post Card.
The silver lining is that cash-strapped Britons are instead heading to places like Scotland or the Lake District, helping outerwear retailers there to hold their ground despite the morose retail climate.
The U.S., meanwhile, offers a bleaker outlook. “Anyone who says their fourth-quarter was good in the U.S. is lying,” said one retailer on condition of anonymity.
Elsewhere, retailers from Russia, one of the most promising markets last season, have disappeared. “I haven’t seen one [Russian buyer],” said Reto Scheidegger, head of marketing at Zimtstern, a Swiss snowboard label with an environmental bent. “They had a bad winter last year and then the financial crisis. I think they’ll skip this season.”
Likely due to the economic climate and heavy snowfall, designs moved away from last season’s bling toward performance, albeit at higher prices.
“We couldn’t sell it for love nor money,” said Snow & Rock’s Campbell of previous season’s hits such as Spyder’s Swarovski crystal studded designs. Instead, women’s technical brand Kjus has become the chain’s bestseller.
“We’re seeing a lot of highly technical fabrics because it was a good year for snow,” concurred Jonathan Wong, buyer for Canadian chain Mountain Equipment Co., where sales in the snow sports category are growing double-digit versus the prior season. “We’re up legitimately. Not as in ‘flat is the new up.’ We’re actually up.”
Hit labels offering fashion and function included Germany’s Toni Sailer. After a sales leap of 70 percent in 2008, Toni Sailer expects further increases of between 30 and 40 percent this year, spurred by bestsellers such as down jackets in silver and plum.
Italian label Hell is For Heroes’ Tibetan-inspired collection was also praised.
One technology attracting activewear brands keen to add lifestyle collections was Epic, a system made for military clothing by U.S. company Nextec that infuses a silicone polymer into any woven fabric to make it waterproof while remaining breathable.
“Technical brands are going crazy; this could greatly extend their reach,” said Epic’s European business manager Peter Cook, adding O’Neill has already used it to make snowboarding jeans while brands including Howies and Rohan are introducing denim using Epic. “Technical brands often don’t want denim unless it’s technical, because otherwise they’re diluting their brand image.”
In board sports apparel, bright colors, such as fuchsia and purple abounded, recalling the Eighties. For its 20th anniversary, Nike’s outdoor line ACG showed a printed down jacket which changes color from pink to purple in the cold, a throwback to the Eighties heat-sensitive T-shirts.
The show was awash with down jackets, often in longer styles. “It’s the Moncler inspiration,” said Céline Postigo, product manager for outdoor textiles at Intersport. “Last year, Moncler jackets popped up at all the ski stations, so this year everybody’s doing it.”
Wool abounded, too, while fur trimmings — fake, recycled and real — popped up everywhere. And nearly every label offered helmets, following a fatal accident in Germany. “I’m wondering if there isn’t a law about to be passed making helmets obligatory,” said Ethel Chassary, trends and views designer for French activewear chain Decathlon, now called the Oxylane group.
Recognizing efforts to reduce the industry’s environmental impacts, ISPO handed out its first Eco Responsibility Awards.
Among new contenders in the green field was Pyua, which claims to be the first complete cradle-to-cradle brand. Its 40-piece line, including classic ski jackets and pants, T-shirts and outdoor wear for women and men, are mostly made from recycled polyester manufactured by the Japanese firm Teijin, which also supplies Patagonia. Pyua aims to close the recycling loop by encouraging customers to hand in the clothing via bins in stores or sending them by DHL.
Another hit was Zirkeltraining, a bag collection made from recycled leather once used for sports equipment by German gym teacher Bernd Dorr.
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