Easton-Bell hopes to limit recession’s impact

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It’s always interesting to talk to retailers and manufacturers when their top executives have one ear tilted to hear what the National Bureau of Economic Research has to say about whether the country has entered a recession -- and, if so, when.

Paul Harrington, president and chief executive officer of Van Nuys-based Easton-Bell Sports, proved to be no exception. We talked by telephone a few weeks ago, after the company had released its third-quarter financials, but before the NBER ruled that a recession had begun late in 2007.

Easton-Bell reported a solid increase in revenue (from $188 million to $203 million) for the third quarter ended Sept. 27. Net income slid slightly to $6.6 million from $6.8 million during the same quarter a year ago.

‘We’re pleased with our results through the first nine months,’ Harrington said. ‘We’ve been able to grow our sales in all our major areas -- cycling, snow sports, hockey, football, and even hold our own in baseball, which has been soft.’

But Harrington also acknowledged the very apparent economic slowdown: ‘You’d have to have your head in the sand not to be concerned about the economy going forward.’

The worldwide retail sporting goods market was estimated at $229.5 billion in 2005. But Easton-Bell plays mainly in the U.S. market, which the Sporting Goods Manufacturers Assn. estimated at $66.4 billion in 2006.

Easton-Bell manufactures hockey and baseball equipment and apparel (under the Easton brand), football helmets, shoulder pads and other protective gear (Riddell) and bike helmets and gear (Bell Sports and Giro).

Harrington doesn’t expect Santa Claus to be particularly naughty to Easton-Bell because the company isn’t as dependent upon the holiday shopping season as many other manufacturers. ‘For us, ut’s more about when the season starts, whether it’s football, baseball or hockey,’ Harrington said.

But Easton-Bell could feel the recessionary chill come June, when cash-strapped school boards set budgets for the coming school year. He sees ‘a potential risk’ for cost-cutting that could impact football sales at the high school level. The company also faces a continued, soft market when it comes to baseball.

Easton-Bell will ‘make sure that we have the right price points and product,’ Harrington said, but don’t expect dramatic price-cutting.

The company instead is betting that its high-tech gear -- think carbon-fiber hockey sticks, composite skates and shock-absorbing football helmets -- will continue to appeal to top athletes in the youth, scholastic, collegiate and professional ranks. Easton-Bell also expects its bike helmet sales to grow as more consumers turn to bicycles to get around.

Though he acknowledges that sports gear and protective equipment aren’t recession-proof, he argues that they are recession-resistant. The company will continue to market the fact that its gear is used by professional athletes -- including the Ducks’ Ryan Getzlaf. And Harrington’s counting upon parents to do what parents traditionally have done during good times and bad.

‘Parents want their kids to play,’ Harrington said. ‘And they’re going to find a way for them to do just that. We intend to be there with the right product proposition at the right price.’

-- Greg Johnson