No Snow Woes

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No Snow Woes
Owner David Craycraft with unsold ski equipment at Doc’s Ski Haus in Santa Monica.

Sure, the economy has been problematic for local sporting good stores. But this year, they faced something even more worrisome: a mild winter that brought very little snow.

“If I had to pick between a bad economy or no snow, I’d pick a bad economy,” said Ken Demaret, owner of San Gabriel-based Ski and Snowboard Liquidation Center, who buys from stores that are going out of business and sells those goods at two outlet stores. “A lot of stores across the country will go out of business this year.”

That’s because shops that sell skis, snowboards and ski wear rely heavily on snowfall in the nearby mountain resorts to make sales, even when those stores are in the sun-dappled Los Angeles Basin. But the snowfall this season is the lightest in 10 years.

“A good snow year makes me look like a genius, a bad one makes me wonder why I do this business,” said David Craycraft, owner of Doc’s Ski Haus in Santa Monica. “Last year was phenomenal, but this year is the worst snow year in my time in the business.”

At big-box sports equipment stores, selling skis, snowboards and coats is a big deal. At Sport Chalet Inc., for example, 15 percent to 17 percent of the La Canada Flintridge-based company’s annual revenue comes from winter-related goods. But those things don’t sell if there’s no snow. By Jan. 1, Sport Chalet reported sales of snow-related merchandise were down 22 percent, and smaller specialty stores report similar drops.

Craycraft said sales at Ski Haus this season are down about 15 percent from last year. Demaret said sales at his outlet stores are down close to 20 percent.

It’s easy for a retailer to get stuck with unsold merchandise. That’s because sports equipment retailers typically order merchandise for the winter season eight to 10 months in advance, and buyers have to rely on guesswork and past sales numbers.

Craig Levra, chief executive at Sport Chalet, said that his buyers do weather and sales analyses, but have to rely on their instincts. This year, they ordered less ski gear than in previous years because they didn’t think they could count on a third consecutive year of heavy snowfall.

“The last two winters started late, but they were great,” Levra said. “We didn’t anticipate lightning striking three times in a row.”

And it didn’t: A little more than 20 inches of snow has fallen in Big Bear this season, said Michael Anderson, state climatologist at the Department of Water Resources in Sacramento. That’s less than half the average snowfall of 45 inches for the resort through February. The last time snowfall was so light was the winter of 2001-02, when only 15.8 inches fell the whole season.

On sale now

Even though Sport Chalet didn’t stock up as much, it still has excess inventory. As a result, the chain, like other retailers of winter goods, has been forced to put merchandise on sale sooner and with steeper discounts than it would like.

Craycraft said that after a good season, he puts merchandise on sale in mid-March. This year, he started putting his gear on sale last week.

“When you’re sitting heavy on inventory, you know that your competitors are the same way and you’re going to have to go on sale earlier than you would otherwise want,” he said.

Mark Richards, owner of the Val Surf and Sport chain in Valley Village, said sales for outerwear have been worse in his stores than sales of skis, snowboards and boots. The stores had a sale over Presidents Day weekend, earlier than usual.

Richards said that when he can’t sell product, he sometimes gets help from vendors who will take the product back and move it somewhere else in the world where there is snow.

“They’ve come in and helped when they could,” he said.

After a bad snow season, retailers tend to mark things down about 10 percent more than after a good season.

Craycraft said he won’t sell his overstock to a liquidator. He’d rather give deep discounts to his customers.

“Anything you sell to a liquidator you’re selling at a net loss, period,” he said. “You’re better off making it 50 percent off for your customer and at least making them happy.”

The lack of snow this season hasn’t been good for Demaret’s outlets, one in San Gabriel and the other in Costa Mesa. But there is an upside: He goes to the same trade shows as other sports equipment retailers to place orders for products, but he also buys inventory from stores that are going out of business for prices that are 30 percent to 50 percent below wholesale.

“Maybe because of the season we’ll have more opportunity to pick up better prices,” he said.

Unlike stores that focus solely on equipment for winter sports, chains such as Sport Chalet and El Segundo’s Big 5 Sporting Goods Corp. can pick up some of the slack by pushing for sales in other categories. Sport Chalet, for example, offset its losses this season with a 6.6 percent increase in sales of nonwinter items. And because they carry sports equipment for all seasons, Sport Chalet and Big Five can be helped by what could be a longer spring season.

“For people who like to be on the mountains, biking and hiking will start earlier,” said Sport Chalet’s Levra. “We’re positioned to take advantage of those business opportunities as they occur.”

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