Words of wisdom from OIA President and CEO, Frank Hugelmeyer:
"Many in the country will be approaching Thanksgiving this year with ambiguity. Millions have lost their jobs or know someone who has. Businesses have failed. Families are struggling to keep their kids in college or hang on to their home.
But just as past sorrows prepare us to experience future joy, the last year has paved the way for a renewed and perhaps more sustainable prosperity. From mom and pop retailers to public companies with international brands, leaders agree that the Great Recession has strengthened our industry. The trepidation of Thanksgiving 2008 has been replaced by cautious optimism, confidence and – yes – relief.
Relief that more outdoor retailers and brands did not fail. Relief that the rampant discounting of a year ago has not repeated. Relief that the old saw about the outdoor industry - that in times of financial stress Americans return to the outdoors for consolation, renewal and value – has been validated yet again. There is even renewed optimism that after years of neglect, our federal public lands and conservation efforts are going to get the funding they deserve.
In October, 68% of respondents to the Piper Jaffray Outdoor Industry Surveysaid they were expecting increased revenue in the next three months. That was up from 50% just four months earlier. The latest survey also shows executives are more optimistic about investing in people and inventory than they were in early summer.
While the country and the economy still face many challenges, there is abundant evidence that this optimism is not misplaced. Clearly, our industry has accomplished much in the last year. We have adapted with impressive alacrity.
By and large, vendors and dealers have found ways to cuts costs faster than consumers have cut their spending. Inventory reductions of as much as 20% are common. In a matter of a few quarters, companies have found a way to grow profits amidst declining sales. With consumer spending now rebounding, many of our companies are poised for strong profit growth.
Retailers have been particularly nimble and disciplined. They have trimmed pre-season orders, worked off inventory and are using technology to identify the best performing SKUs, buy opportunistically, order closer to need and reach their customers in new and compelling ways at much lower cost. Some are taking advantage of plummeting real estate values to open new stores on very favorable terms. As of mid-November, retailers were more worried about running out of product than having to slash prices to liquidate inventory.
On the brand side, where there has been consolidation, it has by and large remained within the industry. Vendors’ emphasis on cash management over the last year has bolstered their balance sheets. Many of the few publicly traded outdoor companies are sitting on more cash than when the recession began. That puts the industry in a good position to keep our younger, faster-growing brands within the family.
We did not waste this crisis. We took advantage of it to become a stronger, more sustainable industry. We emerge more profitable and ready to invest in our companies, people, products and communities.
In short, while we all need to proceed with caution, the outdoor industry is in position to gain market share and shift our focus toward growing the business.
It appears our best days lie ahead and that’s a lot to be thankful for.
Frank Hugelmeyer
Outdoor Industry Association
President & CEO"
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