When snow piles up, so do sales
After a miserable winter and a weirdly warm early fall, shops that sell snow gear are getting a break.
“Ever since we got snow and cold weather, everything’s good,” said Duke Edukas, co-owner of Surfside Sports in Costa Mesa.
“Prior to that,” he said,” everything was bad.”
With a blanket of white from Big Bear to Boston, and 10 shopping days until Christmas, the season could be looking up for retailers and manufacturers, including Quiksilver Inc. of Huntington Beach and Costa Mesa’s Volcom Inc.
“December is by far the heaviest retail month in snow sports,” said Kelly Davis, director of research for SnowSports Industries America, a trade group.
Independent merchants that sell parkas and goggles had a rough November, according to Robert W. Baird & Co. analyst Mitch Kummetz. Of the 52 independent skate, surf and snow-gear retailers he surveyed, 48% reported sales declines in November compared to 2006.
For snowboarding equipment -- boards, boots, bindings and such -- sales were down 14% from August to October compared with the same three months in 2006, Davis said, and apparel sales were 4% lower.
The last couple of weeks “have been great for the industry,” she said.
As of Wednesday, more than 50% of the nation was covered in snow, compared with about 20% on the same day last year, according to Weather Trends International. And the forecast is cooperating, said Richard Woolley, the group’s vice president of operations. A “parade of storms” in the Pacific is marching toward the West Coast and “there’s more coming right on through Christmas,” he said.
The Pacific Northwest will get the brunt of the weather, he added, although Southern California should see at least one more storm.
Just seeing the San Gabriel or San Bernardino mountains dusted in white gets people “amped up,” said Victor Shaw, a store manger at ZJ Boarding House in Santa Monica. “Definitely there’s more buzz. People are getting their boards waxed up. “Last year was a crusher.”
So much so that shops placed 2007 orders with manufacturers cautiously, fearing snow could be a no-show again. Edukas said Surfside Sports had sold out of some styles of pants and jackets and was running low on boots and bindings.
“Our sales in December will be equal to that of October, November and half of September combined,” he said. “If we didn’t have snowfall, it would have been a real ride by the seat of our pants.”
Reorders are piling up at snow apparel maker Sessions, based near Santa Cruz.
“I think a lot of shops will sell out because I think they ordered conservatively,” Chief Executive Joel Gomez said. “We’re [like] farmers. It’s all weather dependent.”
Quiksilver, whose brands include Roxy, DC, Hawk and Rossignol, could use some chill in the air. It has lost money the last three quarters. It reported a fiscal fourth-quarter loss Thursday, citing charges tied to weak results for ski maker Rossignol and losses associated with the sale of its Cleveland Golf unit.
Looking ahead, it predicted it would incur “a small loss” in the first quarter because of ongoing problems with its hardgoods business, which includes skis, snowboards, boots and bindings.
Quiksilver stock fell 12% Friday, closing at $8.91. It is down 43% this year.
Weather has been a factor for competitor Volcom, which disappointed investors in October when it forecast that profit would be lower than expected for the fourth quarter and the year, citing slower-than-projected sales of outwear partly due to the “challenging 2006 snow season.”
Volcom’s stock is down 15% for the year. It closed Friday down 81 cents at $25.18.
Mother Nature can help only so much, said Jeff Mintz, an analyst with Wedbush Morgan Securities in Los Angeles.
“If the ski season is really good, they could get some reorders in January, which would improve things,” he said after Quiksilver’s earnings call.
“But they’re limited in how much reorder business they can do because they produced less this year, knowing it was going to be a tough year,” he said.
