Boomtown Sports Inc.: Cutting Edge
After 11 years in the ski retail business, Dale Arsenault knew if he wanted to be on the cutting edge and sell any Boomtown Sports Inc. skis made at the company’s Kootenay plant, he had to be at demo days.
Demo days at ski hills are do or die for ski manufacturers. In a single day, athletes will try more styles of skis than they can remember and, just maybe, the one pair they can’t forget. That’s the hope of the ski reps who roar up to the hill in their shiny SUVs plastered with company stickers. After sliding into the reserved parking spots at the front of the snowy lot, they unload their 10 or 15 pairs of skis into the snow, set up a booth and get to work.
After 11 years in the ski retail business, Dale Arsenault knew if he wanted to sell any Boomtown Sports Inc. skis made at the company’s Kootenay plant, he had to be at demo days. So last winter up he went to Red Mountain Resort near Rossland, to let powder junkies compare his three models against the big boys: Salomon, Atomic, Rossignol and K2. He parked his vehicle beside the other reps and headed up the mountain. Things went pretty well that day – his skis garnered rave reviews. When the lifts stopped turning Arsenault headed to the car with a smile on his face, but his good mood was short-lived. He’d been towed. “No one came to ask me to move it,” he says. “All that mattered was that it didn’t say Salomon on the side.”
Such is life when you’re the little guy competing among giants. The Clearly Canadian battling Coke and Pepsi. The Lululemon duking it out with Nike and Roots.
In the world of ski makers, Arsenault is downright tiny. He pressed 200 pairs of skis two years ago and is still selling them for $445 a pair, while a giant like Slovenia-based Elan Skis presses 400,000 pairs a year, retailing for up to $1,000 each. In an industry ruled by Goliaths, Arsenault is part of a growing number of small ski manufacturers who survive by carving out a niche. Many of these companies are founded by passionate skiers who are dissatisfied with what the big players produce and are convinced they can do better. B.C.’s vibrant ski culture and terrain have produced four such ski companies in as many years, and for a few the challenge is staying small amid growing demand for their skis. Arsenault’s is the second-smallest of these companies, which are all privately owned (and therefore did not give BCBusiness much in the way of sales figures or financial information). None comes close to the might of industry leaders, but none wants to. Genuine Guide Gear (better known as G3), Prior Skis, Capital Custom Skis and Boomtown are all trying to avoid wipeouts in a race with pros by doing things differently.
“It ain’t easy to be a small ski manufacturer,” observes Bob Orbacz, the director of finance and operations for SnowSports Industries America in McLean, Virginia, which represents ski and snowboard companies in North America (he’s also the former president of U.S. operations for Elan Skis). He says a few big manufacturers – K2, Rossignol, Elan and Salomon – currently sell 75 per cent of the skis on the market. About five or six medium-sized manufacturers sell about 20 per cent, leaving 30-odd smaller companies to fight over the remaining less than five per cent. New companies struggle to find retail reps, convince shops to carry their brand, win over skeptical skiers and get their products reviewed in the top ski magazines.
But as Orbacz points out, making money in a retail environment is really the hardest challenge. “The price of most ski packages hasn’t changed in 15 years,” he says. “What does that tell you? Retail stores aren’t letting their margins slide.” Ski store chains, especially in the U.S., are asking for better discounts on large orders, pressing manufacturers to pay for shipping and looking for more marketing and advertising support every year. “They’re beating the hell out of their suppliers,” Orbacz says.
That’s why all the B.C. ski makers avoid the retail market – except one, G3, a backcountry snow-gear manufacturer based in North Vancouver. Unperturbed (or maybe naively), G3 owner Oliver Steffen decided to sell his ski line using G3’s already established network of retail locations – 800 stores worldwide, 400 in North America – but on his own terms. “We don’t deal on our products,” says Steffen. “Whether you buy one unit or 1,000, you pay the same price. That’s very different in the ski industry.” Everything about G3’s ski line goes against the industry norm, but it seems to be working; in its first year of production G3 tripled its sales target, says Steffen.
Unlike most ski manufacturers, who collect orders from retail shops in January and then get their skis made, mostly in European and Asian factories, for delivery in September and October, Steffen forked over the cash and pressed what he considered a decent first season’s worth of skis in a Tunisian ski factory. The North African facility is owned by a Swiss ski maker who picked the location for the level of dedication of workers. Steffen spent a week at the factory in 2003 talking to employees. “You don’t need to know skis,” he says. “You need to care about quality and care about what comes out of the factory. They do a good job because they value their job. Jobs are hard to find over there.”
The Tunisian factory produced four ski models for G3, mostly designed for no-lifts, human-powered backcountry skiing, and shipped them to the company’s Montreal warehouse before any retailer knew the company was even making skis. In October 2003, after retailers had already received their inventory for the season, G3 sent out an email to its network of distributors announcing the launch. “The shops had every reason not to buy any skis,” Steffen says. “We kept our expectations low. There was never any sales pressure.” Stores didn’t need any.
“It was hard on our budget,” remembers Jerry Mundi, the owner of Courtenay’s Valhalla Pure Outfitters, an independently owned chain of B.C. outdoor retailers that landed 20 pairs of the 2,000-pair first shipment. “It was a big step, but I didn’t hesitate. I was happy to get them.”
Within four days of the news of the launch, the first order was sold out. A second factory run sold in four weeks, and a third carried G3 through the first winter. Sales kept ticking along even though the skis, at about $700 retail, are around $100 more than other backcountry skis. G3 is now B.C.’s biggest ski manufacturer and doesn’t consider itself a small fry anymore. “We’ve sold way more than we ever imagined,” Steffen says. “We don’t know where all the skis are going.”
It didn’t hurt that G3 already had a successful line of backcountry ski accessories such as shovels, telemark ski bindings and avalanche probes. Its established retail network eased G3’s entry into the ski business. “People don’t worry if our product works or not because they know that we are skiers and we produce good stuff,” Steffen says. Skis, G3’s first big-ticket item, gave retailers and customers a sign that G3 had matured which, in turn, boosted sales of its existing accessory items. Over the 10-year life of the company, sales revenue jumped from $50,000 in 1996 to $6 million last year.
Mundi says the same is true for Prior Skis, where anyone can visit the factory and watch skis get pressed. Since 1990, Prior Snowboards, a Whistler-based snowboard manufacturer with 35 World Cup snowboard race wins and a loyal following for its backcountry snowboards, has gained a solid footing. When Prior started pressing skis in its Whistler factory in 2004, some of the first customers were Prior snowboard owners who also skied, says Dean Thompson, the company’s GM. Prior started with one ski design but has since pumped up its line to three, available to order with six choices in how the base of the ski will look, seven choices for graphics on the top and three choices in fibreglass weight. Unlike G3, Prior’s initial business plan was to sell only on its website. “We couldn’t afford to build virtually custom skis and sell them at a price retailers could buy them at, and still make money,” Thompson says. “Going into retail happened by pressure from vendors.”
By 2005, snowboard shops and specialty ski shops were hounding Prior for skis, despite the $899 price tag. Comparable skis from Rossignol would come with a binding for about the same price, a savings of at least $200. It’s a tough sell for retailers who have to eat markup and still convince customers to pay extra for quality. “They don’t give any leeway in pricing,” says retailer Mundi. “We’re not going to make a lot of money on them, but they’re a quality product and that’s what’s important.”
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