Obermeyer sales to soar as snow falls?
Skiers aren’t the only ones smiling now that the West is getting pummeled by snowstorms again.
Klaus Obermeyer, founder of the Aspen-based skiwear company that bears his last name, said that snow and cold around the country is helping his firm bounce back from sluggish sales.
“I smile at every flake that comes down,” Obermeyer said. “That’s a lot of smiling.”
Sales were flat this year compared to 2001, according to Obermeyer director of marketing Barbara Owen.
But company officials felt fortunate to hold onto their business for a couple of reasons. First, sales in 2001 were strong – up 30 percent in dollar volume. Second, the economic fallout from Sept. 11, 2001, didn’t strike Obermeyer until this year.
The skiwear business always operates a year ahead of the calendar. For example, Obermeyer is currently showing retailers its line for the 2003-04 winter even though the 2002-03 winter is only one-third over.
Orders are placed early in the year for the following winters. The merchandise starts arriving in stores by July, August and September.
Therefore, by the time the Sept. 11 terrorists strikes affected the economy, Obermeyer had already filled the initial orders for the 2001-02 winter.
When retailers scaled back due to the slower economy, it primarily affected sales for the 2002-03 winter rather than for 2001-02.
Owen said Obermeyer believes it increased its share of the skiwear business this year even though its sales were flat. In other words, competitors were hit harder.
She said that in tough times, skiwear retailers tend to go with suppliers they have the most faith in and ones that deliver the best customer service.
“We’re kind of the meat and potatoes of the assortment,” she said.
A blast of winter provides the gravy. Obermeyer is benefiting in two ways from the snow and cold. The weather helps send merchandise for the current winter out the door, and it makes retailers more optimistic about ordering for the next winter.
Retailers typically order additional skiwear when their stores sell out of lines. Those reorders are a vital part of Obermeyer’s business.
It’s also risky business. If the company overestimates the reorder market, it can be stuck with unsold merchandise. If it underestimates, it loses out on sales.
Obermeyer bases its estimates of reorders in large part on the size of original orders. Still, it’s an inexact science.
“That’s the art of the business,” Owen said.
Klaus Obermeyer said he expects sales to increase again 20 to 30 percent. Before this year, 1998 was the last time the company didn’t experience strong growth.
The company expects strong sales, regardless of whether the national economy remains sluggish – assuming it is at least an average winter.
“I think good snow will override a poor economy every time,” said Obermeyer. He said the company’s sales are about 90 percent dependent on winter weather.
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