Outdoor Retailers Adapt to Warming Trends

Unseasonably warm weather is cooling buyers’ confidence in winter merchandise.

Last winter’s high temperatures led to it being the fourth warmest in U.S. history, according to the National Climatic Data Center, and average national temperatures last month were more than three degrees higher than the 20th century’s long-term average, making it the 10th warmest December ever. Twenty states had monthly temperatures that ranked among the 10 warmest on record, according to the NCDC. The resulting sales slowdown on cold-weather footwear has some retailers in a state of alarm.

“The lack of snow really does hurt business substantially,” said Bob Greenly, owner of outdoor shop Trailfitters in Duluth, Minn. “This is the second winter in a row where there’s not been a demand for true insulated footwear, so we’ve got to be even more cautious for next year.”

The retailer said the effects of the mild winter in 2011/12 left him with excess inventory and forced him to modify his fall ’12 buys. As he begins to plan for fall ’13, Greenly has his reservations. “We’ll cut back fairly substantially on our true winter footwear — even more than 2012 buying,” he said.

And Greenly isn’t the only one who’ll make changes. Jim Wellehan, president of Auburn, Maine-based Lamey-Wellehan, said slow boot sales at his six locations these past two winters have led him to re-evaluate his fall ’13 buying strategy.

“When you sell X amount less of something, it’s a job to find new things [that will sell better],” Wellehan said. “The nature of boots is becoming more fashion-driven and less winter-driven, so we’ll just have to find new products that work.”

In Vermont, which also experienced abnormally high temperatures last year, Farm-Way Inc. VP of footwear Skip Matayer said he bought about 75 percent less winter product for fall ’12. And as a result, he added, his store is in a much better position to clear out boots this year. In preparation for the upcoming season, the buyer will look to bolster the footwear offering with lower-priced winter product.

“Consumers are coming down on how much they want to spend on a pair, especially when they have to wonder how many times they’ll actually use them,” Matayer said, adding that shoes in the $75-to-$120 range seem to be the sweet spot.

Heading into fall ’13, Matayer said he planned to increase the overall stock to the levels of previous successful winters. And he anticipated additional opportunities to buy going forward.

“More vendors are becoming a little more lenient with adjusting orders prior to ship because they’re hurting just as much as we are,” he said.

Ritchie Sayner, VP of business development at RMSA Retail Solutions, a retail consulting firm based in Riverside, Calif., advises those still stuck with excess winter goods to take the markdowns, liquidate the product and move on to fresh merchandise.

“The worst thing retailers could do is drag out old stuff from the backroom and try to pawn it off as new product that’s just arrived,” Sayner said. “It also ties up open-to-buy and cash flow that could be spent on things for next season.”

As winter weather continues to affect sales, vendors in the category have learned they must also adapt.

“Anytime there’s warmer weather, there are usually adjustments in buys because of retailers having to carry over product,” said Tim Bartels, VP of global footwear sales for Columbia Sportswear. “We try to proactively manage what we sell in, and it’s really a collaborative process with our key retailers.”

Bartels said Columbia has been open to holding back product shipments to retailers with weak sell-throughs.

The company also has seen more success in leather-fashion, trail and waterproof shoes, and will focus more on those categories for fall ’13.

“Retailers are looking for versatility in their assortments with styles that have a longer shelf life and don’t necessarily need snow to sell,” Bartels said. “We’ve been through these cycles of lack of winter weather before, and we’re preparing ourselves with the lines we have.”

Russ Hopkus, VP of global sales and market development at Keen, said the lull in demand for true winter products has improved results in other categories. Sales of sandals for the Portland, Ore.-based brand during the fall hit their highest peak these past two years.

“If I had to generalize, I’d say most retailers are still somewhat cautious, and it’s teaching us all a lesson that we can’t be so weather dependent,” Hopkus said.

Experts said unpredictable winter patterns could continue in the long term. According to a study by the National Resources Defense Council and non-profit group Protect Our Winters, diminished snowfall in the U.S. may be the direct result of global warming.

“This is exactly what climate change is projected to cause in the future — less snow and shorter seasons,” said Antonia Herzog, assistant director of the climate and clean air program for the NRDC.

The NRDC and POW estimated that the U.S. winter tourism industry lost $1 billion over the last decade because of lack of snow. Winter temperatures also are projected to warm another 4 to 10 degrees Fahrenheit by the end of the century.

“Retailers who depend on business in ski or snow areas are going to be out of luck,” said Elizabeth Burakowski, lead author of the NRDC and POW report. “It’s going to be tough for those businesses to make up losses because there won’t be people spending money.”