Four Keynotes Examine Consolidation At SIS

Representatives from specialty retail, large corporations, small brands, and big box sporting goods stores all offered differing perspectives on snow industry consolidation during the third day of the TransWorld SNOW Industry Summit.

Over the course of the afternoon, a standing room only crowd listened to the four short keynote addresses from The Sports Authority Senior VP of Winter Sports, Golf, and Racquet Art Hagen; K2 Inc.’s President and COO Wayne Merck; President and Founder of Board Retailers Association and Owner of Surf City Surf Shop Roy Turner; and Owner of Strategic Distribution Todd Crisman.

In his address Hagen gave his perspective on whether bigger was really better. “Mergers typically affect management and the higher-ups of companies are the ones who end up loosing jobs,” he says. “That used to really bother me until I realized that acquisitions do save the blue-collar jobs of the struggling companies.”

When discussing how consolidation has hurt the snow industry, Hagen expressed frustration with a lack of excitement both in retail and manufacturing. “Equipment seems to be flat and stagnant—there just aren’t any new products to get excited about,” he says.

Hagen suggests the industry as a whole needs to focus on catering to the youth, lower its pricing, and anticipate the new baby boom in order for snowsports to stay healthy. Specifically on the snowboarding side, Hagen believes that the sport needs to stay American. “As more and more things move offshore, you need to keep the control and engineering here in the U.S,” he encourages.

Following Hagen’s speech, Wayne Merck of K2 Inc stepped up to the podium. Merck first noted that its important to understand that K2 Inc is an almost one-billion dollar public company with K2 Sports operating as a company within it. The distinction is key when looking K2 Inc as a whole.

Twenty-eight brands exist across the five distinct platforms: Rawlings covers team sports; Shakespeare caters to the fishing enthusiast; Stearns is geared to the marine/outdoor crowd; K2 Sports produces both winter and summer goods; and Brass Eagle is devoted to paint-ball. Winter sports makes up roughly 25 percent of K2 Inc’s business operating out of its Vashon Island, Washington headquarters.

According to Merck, the sheer size of the company has allowed it to put a U.S. merchandising group in place in 31 markets. The merchandising group will provide year-round in-store support for multi-sport retailers.

Merck believes the snow industry as a whole needs to beat competition from other arenas like video games and the intranet. “We need to make it more fun to be out on the snow.” he says. “Innovation is key, and I applaud all of the small innovators out there.”

After a short break, Board Retailers Association President and Founder Roy Turner took the stage exclaiming: “Specialty Retailers Rule!” After coaxing the audience to say cheer the phrase out loud a couple of times, Turner suggested that every manufacturer take a specialty retailer out to lunch once a week. “These are the people who are on that floor talking to the consumers every day. They know all of your fit problems—everything. You can find more out about your company in one hour than you’ll research all year,” he says.

Turner paints an exciting, optimistic, and heathy picture of the existing specialty retailer. “Fourty-four percent of this market is made-up of specialty shops—that 2,314 single stores,” says Turner. “The big guys are consolidating, specialty is growing—together. Specialty retailers look to consolidation of voice.”

Specialty retail is in a state of focused evolution according to Turner: “We continue to push fringe ideas, product development, and to cultivate new experiences for our ever-growing and emerging audience.”

When Turner had left the podium, Todd Crisman owner of Strategic Distribution followed saying with a laugh: “I’m honored to be up here, but man I wish I wasn’t following Royy.”

Crisman offered a small-independent brand perspective on the wave of consolidation that has been hitting the industry over the years. “I’m not pro-independent, anti huge corporation,” he says. “The reason I am in this business is because I’m passionate about it. The ultimate reward for me comes not from the money, but from seeing kids out on the hill wearing my products.

“I look at it as a means to an end. If the bills are being paid and my family is being taken care of—then I’m okay,” he says.

Bringing the audience back to Turner’s speech, Crisman focused on the relationship between small brands and specialty retail. “Small brands like mine provide retailers an undying support to the lifeblood of snowboarding,” he says. “For us, its much more than a commodity—its life.”

The TransWorld SNOW Industry Summit had gathered more than 300 executives from snowboard and ski manufacturers, retailers, and resorts to discuss issues facing the group. Produced by TransWorld SNOWboarding, with partners Mountain Sports Media and SIA, the SNOW Industry Summit was held April 1 to April 4, 2004.