Outdoor industry grows in economic hard times
The Boulder-based Outdoor Industry Association also has grown a bit in the past few years, and serves 4,000 industry members, said its president, Frank Hugelmeyer. He spoke about positive trends in his industry on Tuesday, July 10, at the Boulder County Business Report’s CEO Roundtable on the sports and outdoor industry.
“The American consumer, in 2008 (when an economic recession hit), had to decide what was important to them in their lives. We made that list. We absolutely are one of the best-positioned industries,” Hugelmeyer said. “It’s their outlet to stress. When you can’t trust your job, you can’t trust the government … you go biking, hiking, camping, paddling or whatever it is.”
The stress-reliever trend also has helped hammock company Trek Light Gear LLC grow rapidly in recent years, said Seth Haber, owner and chief executive. After years of selling directly to consumers from the company website, Boulder-based Haber said he recently signed agreements to work with online sales heavyweights Amazon.com and the Home Shopping Network.
“‘Life is better in a hammock.’ That’s the tagline,” Haber said. “People say this is stress reduction. They’re getting out more, relaxing, and I have this product that fits.”
Not only are people getting outside more in recent years, but they also seem to want more information about what to do once they’re out there, said Andy Clurman, president of Active Interest Media in Boulder, which publishes magazines such as Backpacker and Climbing.
“Demand and interest is as strong, or stronger, than it has ever been,” Clurman said.
The outdoor industry also has suffered growing pains in recent years, Hugelmeyer said. One of the biggest issues for his members is the hit specialty retail stores have taken from Internet sales, he said.
To combat the trend, outdoor companies such as Adidas America Inc. do not allow retailers to sell Adidas products online, Hugelmeyer said. In a related move, outdoor retail stores such as Neptune Mountaineering Inc. in Boulder offer brands no one else carries regionally, he said.
“One of the trends we’re seeing is (selling) direct-to-consumer, and everyone sees themselves in the consumer acquisition business,” Hugelmeyer said. “Before, people would say they’re in the retail business. That has changed permanently.”
About 18 percent to 20 percent of all retail sales were made online for the 2011 holiday season, and retailers are trying to figure out what that means for store sales in the future, Hugelmeyer said. While there’s been a lot of discussion about the trend, he added, no one has an answer yet about how to deal with it.
“What happens to mom-and-pop shops? What happens to malls? We’re in a renaissance, an industrial revolution right now in our lifetime that will change every business decision,” Hugelmeyer said.
The outdoor industry also has unique seasonality needs when it comes to selling products, said Gary Gomulinski, managing director of the outdoor industry division at Vectra Bank Colorado’s downtown Boulder branch. The bank has had great success lending to successful companies that may have cash flow issues in the 18-month lag time between when products are designed in overseas factories and when they’re actually sold in the United States.
“There’s a lag time in bringing things from overseas, and a dramatic change in the product cycle from summer to winter,” Gomulinski said.
Vectra Bank has had success working with companies just getting off the ground as well as companies in the $200 million to $300 million range in revenue, he said. The bank plans to expand its lending focus in the near future to outdoor companies in Utah, before looking to help outdoor companies on the West Coast, Gomulinski said.
The CEO Roundtable was hosted by the Berg Hill Greenleaf & Ruscitti LLP law firm in Boulder. Accounting firm Ehrhardt Keefe Steiner & Hottman PC’s office in Boulder also is a sponsor of the monthly event.
CEO Roundtables :
Jan. 24: Economy, published Feb. 3
Feb. 21: Banking, published March 2
March 21: Smart Grid/Alternative Transportation, published March 30
April 18: Bioscience, published April 27
May 15: Clean Tech, published May 25
June 12: Real Estate, published June 22
July 10: Sports/Outdoors, published July 20
Aug. 7: Innovation, publishes Aug. 17
Sept. 13: Health Care, publishes Sept. 28
Oct. 16: Technology/Telecommunications, publishes Oct. 26
Nov. 13: Natural Products, publishes Nov. 23
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