Pre-Season Snowboard Orders Plunge 30%
mike lewis
- August 14 2009
- 478 views
- 6 comments
SnowSports Industries America (SIA) has released the results of its 2009/10 Orders survey which finds that pre-season snowboard equipment buys are down more than 30%.
Here are some details from the story:
Alpine ski equipment orders are down more than 20% and snowboard equipment orders declined more than 30% in dollars compared to last season’s orders. Retailers discounted prices and sold less last season resulting in thinner margins and less cash flow to pay for 2009/10 season’s orders. Additionally, retailers face a market in which credit is much more difficult to get and interest rates are poised to rise rapidly.
The credit issue was exacerbated last month when the near bankruptcy of CIT, a major creditor to small businesses (including the sports industry), rocked markets worldwide. According to CIT, more than 1,000,000 business customers “depend on CIT to provide the financing they need to run their businesses. And for more than 100 years, CIT has remained committed to the lending needs of the small and middle market – providing needed capital to markets that other larger and smaller financial institutions often don’t.” CIT’s near bankruptcy and the subsequent bailout by bondholders may result in exorbitantly high interest rates and difficulty getting terms other than “net 30” into the foreseeable future. With limited cash and credit, retailers are curtailing their orders for the 2009/10 season.
SIA conducted a short survey with members in July about the potential impacts of CIT’s funding crisis. Most respondents worried that a collapsing CIT would hurt retailers who are already struggling from poor cash flow due to last season’s anemic margins and a very tight credit market. The domino effect created by retailers unable to pay for orders is clearly evident in the Orders Survey results and losing the most prolific creditor to small business would only exacerbate the problem with ever tighter credit and increasing interest rates.
The full results of the story are only available to participants. For more information visit SIA.
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August 14th, 2009 at 6:39 pm
That number is a bummer and hopefully more people don't loose their jobs. But with pre book sales down across the board of action sports shops might just be adding to inventory through out the season.
August 14th, 2009 at 7:34 pm
Hoping for an amazing winter with a lot of snow
August 14th, 2009 at 9:05 pm
Retailers can only add inventory if the suppliers have it available. Most of the major suppliers seem to be saying they are not willing to take the inventory risk, so they will likely not have products in stock for in-season orders if demand goes up. Everyone seems to hope that demand will go up in the second half, but few (if any) suppliers or retailers are willing to take the chance of stocking enough inventory to provide for a demand increase. If demand goes up enough there will likely be a lot of stock-out situations, i.e. missed sales due to lack of merchandise to sell.
August 15th, 2009 at 4:41 pm
this is what we need, they have been over producing, and then selling 20% on closeout to lame stores like sierra and backcountry. We all need to cut off that supply
August 16th, 2009 at 4:43 am
" i.e. missed sales due to lack of merchandise to sell" this might be what we need to get demand. From the brand side, again it's not that I try to over or under order it's a simple matter that I have to order 70% of my product well before a shop writes their first order. Inventory is always an issue and saying the brands are to blame or that they are the ones that sell to sierra is not accurate. it does happen in some cases, but mostly that's the distribution who does that.