Retail - Retail Import Volume Hits Lowest Level in Seven Years As Number of Cargo Containers Drops Below 1 Million Mark

WASHINGTON, April 15, 2009 – Import cargo volume at the nation’s major retail container ports hit its lowest level in seven years in February as the number of containers dropped below the 1 million mark for the first time in half a decade, according to the monthly Port Tracker report released today by the National Retail Federation and IHS Global Insight. Numbers began climbing again in March and April, but the 1 million mark won’t be seen again before May, and imports will continue to see significant declines compared with last year at least through the summer.

“These numbers come during the slowest part of the annual shipping cycle, so they’re expected to be low, but they nonetheless show the severity of the current recession and its impact on the retail industry,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “The good news is that we’ve already seen the bottom for the year, and month-to-month numbers are already starting to climb. We’re still going to see double-digit declines compared with last year, but the size of the gap is starting to narrow.”

U.S. ports surveyed handled only 847,832 Twenty-Foot Equivalent Units in February, the most recent month for which actual numbers are available. That was down 20.6 percent from January’s 1.07 million TEU and 31.3 percent from February 2008’s 1.23 million TEU. One TEU is one 20-foot container or its equivalent.

The number for February, traditionally the slowest month of the year, was the lowest since 818,342 TEU in March 2002. It was also the first time the total has fallen below the 1 million mark since February 2004, when ports in the survey handled 901,497 TEU, and marked the 20th month in a row to see a year-over-year decline. The last year-over-year increase was in July 2007, when the 1.44 million TEU handled was up 3.4 percent from July 2006.

Volume for March was estimated at 930,142 TEU, down 19.7 percent from a year earlier, and April is forecast at 987,371 TEU, down 22 percent. The numbers are expected to rise above the 1 million mark again in May, but will nonetheless remain well below last year’s levels. May is forecast at 1.02 million TEU, down 21.5 percent from last year; June at 1.06 million TEU, down 18.3 percent; July at 1.11 million TEU, down 15.6 percent; and August at 1.15 million TEU, down 16 percent.

The first half of 2009 is now forecast at 5.9 million TEU, down 21 percent from the 7.5 million TEU seen in the first half of 2008. Total volume for 2008 was 15.2 million TEU, down 7.9 percent from 2007’s 16.5 million TEU and the lowest level since 2004’s 14 million TEU.

“The weak port cargo volumes have left port trucking with excess capacity, and cargo is moving without congestion either at the ports or through the inland system,” IHS Global Insight Economist Paul Bingham said. “Rail operations were affected by flooding in the northern states in March and April but disruptions were not sustained enough to cause significant delays.”

All U.S. ports covered by Port Tracker – Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast – are rated “low” for congestion, the same as last month.

Port Tracker, which is produced by the economic research, forecasting and analysis firm IHS Global Insight for NRF, looks at inbound container volume, the availability of trucks and railroad cars to move cargo out of the ports, labor conditions and other factors that affect cargo movement and congestion. The report is free to NRF retail members. Subscription information is available at www.nrf.com/PortTracker or by calling (202) 783-7971.

Non-NRF members can contact IHS Global Insight Director of Business Development Diana Wyman at (202) 481-9265.The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

IHS Global Insight (www.globalinsight.com) provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, IHS Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. IHS (NYSE: IHS, www.ihs.com) is a leading global source of critical information and insight that enables innovative and successful decision-making for customers ranging from governments and multinational companies to smaller companies and technical professionals. IHS employs approximately 3,800 people in 20 countries.

2009 trade shows still draw a buying and selling crowd, albeit smaller ones

The outdoor, fitness and sports industries are not alone in commiserating about trade shows and declining attendance and exhibiting. In 2008, the exhibition industry, including all types of trade shows and conventions, declined 3.1 percent, marking the first annual decrease in business since 2002, according to the Center for Exhibition Industry Research (www.ceir.org).

Overall, four key industry metrics saw declines in 2008, with net square footage for shows dropping 2 percent, the number of exhibitors dropping 2.6 percent, attendance decreasing by 4 percent and revenue slipping 3.5 percent.

"Most trade show sectors are down," Michael Hart, editor in chief of Tradeshow Week Magazine, told SNEWS®. "The most significant problem has been attendance. It's not that companies aren't going, but where they used to send 10 people, they're now sending two or three." Hart added that smaller exhibitors are withdrawing from shows, while larger exhibitors are using smaller booths.

Hart said that the recession has hit some types of shows more than others. For market segments with multiple shows, the main shows are faring well, while smaller shows serving that particular market are hurting. "Some smaller shows have to cancel completely," he said. This holds true for trade shows serving certain sports markets.

"The shows that are annual and service a niche market, such as Interbike, have been affected less than a show that runs multiple times a year and is in a more competitive landscape, like ASR," said Andy Tompkins, group show director for the Action Sports, Interbike and Health & Fitness Business shows within the Nielsen Sports Group (www.nielsensportsgroup.com). ASR (Action Sports Retailer) not only has multiple shows, but also competes with Surf Expo and non-sports-specific shows such as MAGIC.

Smaller, niche shows suffering more
Tompkins said manufacturers and retailers are making hard choices and participating in fewer events for their particular market. While this has had a negative effect on ASR, large shows that occur once a year, such as SIA and Interbike, he said, are doing relatively well because they offer buyers the sole opportunity to reach their respective channels. What 2009 will hold has only begun to see a preview in shows in the first quarter of the year. For example:

>> Snowsports Industries America (SIA) reported buyer attendance dropped 5 percent for this year's January 2009 SIA show in Las Vegas. (Click here to see a Feb. 9, 2009, SNEWS story.)

>> Nielsen reported attendance at the 2009 Outdoor Retailer Winter Market show in Salt Lake City in January dropped about 10 percent (Click here to see a Jan. 29, 2009, SNEWS story, "Outdoor Retailer Winter Market light on traffic, big on smiles.")

>> WSA, a twice-annual shoe show, saw declines at its February show of 18 percent in overall attendance, which covers all attendees from retailers to exhibitors to media.

>> Also suffering, the January 2009 ASR show in San Diego was noticeably smaller this year, with 100,000 net square feet, compared to 131,000 net square feet in 2008, or down about 24 percent. Also, this year the show included 100 fewer brands than the previous year or about a 20-percent drop from 500 to 400 brands.

>> Not as bad as some nor as good as others, the IHRSA commercial fitness show in mid-March reported declines in attendance of about 15 percent, and in exhibitors and in the show's square footage about 20 percent. (Click here to see a March 23, 2009, SNEWS story on IHRSA and here to see a March 30, 2009, story on IHRSA, reporting square footage.)

>> Shows outside the boundaries of North America weren't immune although fared better. At the winter ispo sporting goods show in Munich, Germany, in late January, early attendance figures showed a drop of about 5 percent and exhibitor numbers were down less than 4 percent. (Click here to see a Feb. 5, 2009, story.)

Some of the declines began last year, with the niche FlyFishing Retailer Expo in Denver in September seeing attendance drop 10 percent, and the 2008 Health & Fitness Business seeing lower numbers of attendees by about 16 percent. In this case, the really striking figure out of HFB was in booth space, drayage and staff -- places where exhibitors may try to slice and dice when they still feel they have to be at a show. At HFB in July 2008, even with two additional exhibitors, the show dropped by nearly 13 percent in square footage, but exhibitors also sent 220 fewer staff members, and drayage declined significantly. Some show pundits feel this type of trend may continue across many shows.

Quality vs. quantity
Even when attendance drops, it does not always mean that the show is suddenly a waste of a company's time and attention. Experts agree that exhibitors and attendees remain happy as long as the show continues to draw a quality crowd. As long as exhibitors can interact with influential buyers and fewer tire-kickers, they find real value in the gathering. This was the case for the Eastern Outdoor Reps Association regional show held in February in Greenville, S.C.

"Morale was really good despite the drop in attendance," said EORA Executive Director Debbie Motz. This year the show drew 60 fewer buyers than last year (for a total of 588 buyers), but 291 stores were represented, which was four more than last year.

While the recession is impacting the trade show industry, there is evidence that it will not completely kill attendance and erode the quality of shows.

"Over the last six recessions, we've trended key performance indicators like the buying influences of attendees," said Joe Federbush, vice president of sales and marketing for Exhibit Surveys (www.exhibitsurveys.com). "We've found that the amount of square footage and number of attendees goes down, but the quality of the audience remains pretty strong." He said companies may be sending fewer people, but they're sending more of the final decision makers. "The value of the trade shows is still there for the attendees and the exhibitors."

Nevertheless, Federbush said that these days exhibitors and attendees are demanding more detailed information on their ROI -- the return they get from investing in a show.

"The show organizers really have to be proving the value to attendees and exhibitors," said Federbush. "More now than ever they need to be leveraging their registration data to come out with some more solid numbers. They need to be surveying the quality and quantity of attendees."

Tompkins said that trade show operators within the Nielsen Sports Group are working harder to better understand the buyers who attend the shows, how they utilize the shows and what impact exhibit presentations have on their purchasing decisions. "We've done a series of surveys about buyer behavior," said Tompkins, adding that more reports are generated to show things such as how much a buyer purchases and how many storefronts they are buying for. "Illustrating buying power and storefronts is becoming increasingly important to show producers because retail channels are consolidating," said Tompkins. "Fewer people are doing the buying. Whereas 10 years ago there were 100 specialty shops servicing an area, now there may be 50."

Outdoor Retailer recently sent a 38-question survey to 18,000 retailers and received 1,500 replies, including some surprising information. "Seventy-two percent of the retailers said they wrote orders at the show. That's much higher than we thought," said show director Kenji Haroutunian. "The results were really helpful, and we need to do these surveys every year."

While show producers are generating more data to satisfy customer demand, he and most other trade show managers have not had to offer deep discounts to exhibitors and attendees to draw them to shows. While ASR dropped its exhibiting space rates by 25 percent, other shows such as Outdoor Retailer, Interbike and HFB have for the most part maintained their pricing, meaning no price increases for inflation either.

"That has been possible because the cost of travel has gone down quickly," said Hart of Tradeshow Week. "The cost of hotel rooms in most cities and the cost of plane tickets have dropped in the last six months."

Also, many show producers were well-prepared to weather an economic storm.

"The last recession in 2002 really impacted the exhibitions industry, because people were afraid to travel (due to the 9/11 terrorist attacks)," said Hart. "A lot of the lessons the exhibitions industry learned then they have not forgotten. They've learned how to get lean very quickly."

What's next?
While the trade show industry is doing OK now, the big question is what things will look like later this year or next year. Hart said that many trade shows did not change in size and scope because exhibitors were locked into binding contracts made the previous year. Many of those exhibitors are likely scrutinizing their budgets and considering whether or not they will attend in 2010, or to what extent they will participate. "If your business is having trouble, you might not make a commitment to go next year," said Hart. "Of course, that could change if the overall economy picks up in the third and fourth quarters."

In any case, Hart and others do not think we're going to see the death of trade shows anytime soon. "Even if business is bad," said Hart, "trade show producers are not flipping out."--Marcus Woolf

Did you hear?...BIGresearch survey says economic crisis will continue to affect consumer lifestyles for 5 years

According to the March 2009 BIGresearch Consumer Intentions & Actions Survey, just under 91 percent of consumers feel that the current economic crisis will continue to impact lifestyle spending choices over the next five years.

BIGresearch (www.bigresearch.com) asked: "Do you think the current economic crisis will impact your lifestyle over the next five years in any of the following ways?" and more than 8,000 adults, ages 18 and over, responded accordingly:

I will consider each purchase more carefully -- 55.2%
I will be more price-conscious when buying clothing and food -- 50.7%
I will try to stick to a budget -- 48.1%
I will spend less dining out -- 46.3%
I will not incur a large credit card debt -- 43.4%
I will spend less on entertainment (movies, concerts, sporting events, etc.) -- 39.2%
I will save more of what I earn -- 36.3%
I will be more conservative when buying a car -- 30.1%
I will pay off my credit card each month -- 29.0%
I will not run up home equity debt -- 28.1%I will take more practical vacations -- 23.3%

For more details regarding age, gender and income for this survey, click here.

SNEWS® View: The silver lining in what some might perceive as a consumer spending storm cloud is that practical vacations will most certainly include camping and recreational trips with families seeking to stretch dollars while spending more quality time together. Now, more than ever, the outdoor and fitness industries have an opportunity to market the health and well-being of outdoor recreation and vacations for families. It also means for fitness stores, and outdoor stores, it is time to focus on marketing to consumers to show that what products you offer provide quality of life, health, well-being and high value -- needs for any consumer. There is no doubt in our minds that consumers, while interested in saving money and spending less, still want to have fun and stay fit and healthy while doing so. --SNEWS® Editors

SNEWS View: We are in extraordinary times, but beware of decisions for short-term gain

There is no doubt we are in most extraordinary times. With the New Year have come more layoffs, continued belt-tightening, disappointing financial reports, and increasing challenges as companies struggle to maintain a balance of budgetary mindfulness and investment for the future.

Retailers across the board are running with lean inventories. As sales have slowed dramatically, inventories have often swelled in manufacturer warehouses. Unsold inventory, especially last year’s models, is not a healthy item to keep on a company’s books, so we understand that manufacturers must find creative ways to manage excess inventory levels. However, some ways are clearly better than others, and some just leave retailers shaking their heads in bewilderment.

Take, for example, a recent online notice posted in the Ocean State Job Lot website --
proclaiming:“

As part of an Old Town warehouse clean-out 1,517 kayaks and canoes are on their way to Job Lot stores. These include overstocks, discontinued models and blemished products, 42 models in total ranging in size from 11' to 18'6". 300 are "blems," boats with minor blemishes such as a decal in the wrong place (nothing that compromises their seaworthiness.) The balance is first quality.”

Job Lot operates 85 stores across New England, with stores right in the backyard of many outdoor specialty dealers that carry Old Town – Jersey Paddler, North Cove Outfitters, Kittery Trading Post to name but a few. Job Lot’s stated purpose, and the one that has made it a successful business, is to “sell brand name, first quality products at closeout prices.”

Naturally, getting Old Town boats in stock is wonderful for Job Lot. And cheap boats are wonderful for Job Lot customers. And, it certainly eliminates a problematic warehouse overstock position for Old Town. But that is a short-term gain. What of the long-term implications?

Suddenly, in New England, Old Town has likely created a market where their boats are simply a commodity to be purchased by the consumer at the best price possible. For the specialty retailer near a Job Lot store, it is unlikely that a customer will notice the boats the specialty dealer carries are a newer model or simply a better quality boat. All the customer will likely notice is that the specialty dealer’s Old Town boats are significantly higher-priced than the ones he just saw at Job Lot.

A retailer we spoke with recently told us, “A long time ago, a well-respected member of this industry told me ‘When you can get something everywhere, it is no longer special, and I am a specialty retailer.’ Increased distribution may be a short term answer to a manufacturer’s success, but in the long run it will only force those of us – the ones who showcase their products, train our employees, and educate the buying public (who then go to the off-price merchants to buy the product) -- to find other manufacturers to take their place.”

That retailer went on to state, “When a manufacturer dumps merchandise to bottom-feeding retailers who list their products in newspaper fliers and on websites at “60-70 percent off” two things occur: First, that manufacturer really annoys those of us who bought into their preseason terms. Second, that manufacturer is creating a market where essentially the discounted prices on the same product we are carrying make our own retail customers feel as if we are robbing them blind. And if we are doing it with this product, who’s to say all of our products are not priced too high?”

More than several retailers told us that, yes, manufacturers such as Old Town typically come to them first to offer the discounts before resorting to off-price retailers such as Job Lot, but usually open-to-buy dollars have already been used up buying the company’s products at full-priced preseason amounts. Short of cancelling the preseason orders and moving the dollars to a manufacturer with specialty price integrity, there’s often little a retailer can do except grumble.

Like the current economic situation though, there is no simple answer. No government bailout or stimulus package will solve the challenges that come from a combination of overproduction, overstocked warehouses, buying cycles moving earlier, production lead times getting longer, customer buying habit shifts, and retailers stocking less.

Retailers are customers of the manufacturers. They are under no obligation to buy anything. Just as a retailer’s customers are under no obligation to buy anything from the retailer either. If manufacturers run out of stock, they risk losing or frustrating their customer – the retailer. But, on the other hand, if they have too much stock, they risk angering a customer by then having to sell their product at a much lower price to a discount retailer. Oh, we’ve all heard the arguments – “But that retailer serves an entirely different set of customers.” Bull. Increasingly, and rightfully so, customers are shopping for the best price – online, specialty, discount, or chain. Think about how you buy. Was your recent camera, computer or electronics purchase made at a specialty retailer, or at a store like Costco…or online at Amazon. Price is always going to be part of the buying / selling equation. Notice we said part, not all. A good specialty retailer can always sell at a premium price when it offers high service and education, as long as the products they are selling are not being offloaded weeks later at a discount retailer by a manufacturer thinking in the short-term.

So, what’s the solution? It’s not an easy answer, but we’d love to hear your thoughts via the SNEWS Chat, below. Perhaps together we can arrive at a solution…or at least we can better understand the problem to be able to minimize a negative impact. Together and thinking of long-term gains for us all, we will prosper. Thinking only of individual short-term gains we will collectively suffer. --Michael Hodgson

RETAIL - Six ways to successfully promote your store's eco-conscious product mix

Does your outdoor specialty store boast an array of eco-friendly products? If your merchandise mix does have green leanings, you could boost sales by making the consumers in your area aware of your specialty. Savvy green-oriented retailers are using everything from promotional mailers and catalogs to print advertising and street-side merchandising to get the word out about their eco-friendly product mix. Could any of these strategies work to strengthen your bottom line?

In the mail: Some outdoor specialty retailers have found that direct mail advertising suits them just fine. "We recently sent out a holiday mailer that featured a special section of eco-friendly and sustainable products," said Sharon Scott of The Summit Hut. At REI, a holiday catalog also spotlighted the chain's expanding mix of eco-conscious products with a specially designated two-page section. In addition, other sustainable items in the catalog were pointed out with a green icon. "We launched the ecoSensitive label in 2007 to help our customers make informed decisions on the products they purchase by designating REI brand products made from materials with a high percentage of renewable, recycled and/or organic fibers," said Bethany Nielson, a spokesperson at REI. Currently, the ecoSensitive line includes almost 70 styles of men's, women's and kids' apparel plus gear.

In the press: Advertising your specialty in local or regional newspapers and magazines can also effectively get the word out. "We do some advertising in the local newspaper, local alternative monthly, and quarterly coastal magazine," said Judson Moore, owner of Unfurl, a natural clothing boutique in Manzanita, Ore., that carries a large number of outdoor brands. "The niche magazines are a little bit expensive to advertise in, but we get the most for our money there." The ads run by Unfurl typically talk about the store's eco focus and list some of the relevant brands. Some warn, however, not to go overboard touting your green nature. "You don't want to over-claim and be perceived as greenwashing," said Beezer Molton, owner of Half-Moon Outfitters in North Charleston, S.C. -- a recent SNEWS/Backpacker Retailer of the Year award winner in the sustainable business category, click here to read story.

At retail: Many outdoor specialty retailers still believe the best way to reach customers is right in their own store. At REI, ecoSensitive products are identified with a distinct icon that is printed on the hangtag. At Peak Sports in Corvallis, Ore., owner Jeff Katz highlights eco-conscious products in-store by having the staff call out their favorite products once a month with an index card on which they write their thoughts about the item. "We also have a color coding system that shows what category the highlighted item falls under; for example, a green item has a green card," he said.

On the street: Some believe green merchandising should be taken outside for maximum effect. "Put something just outside your front door that draws people in," said Unfurl's Moore. "Even showing something like an antique chair with a cool old suitcase that has a green product in it really helps you get some of your store presence outside."

On the web: If you have a website, this could be an impactful (and extra green) way to promote your eco products. Online at REI.com, all ecoSensitive pieces are grouped together and easily accessible on one page. "This area is devoted entirely to educating our customers on the ecoSensitive products we sell," said Nielson, "and on the pros and cons of certain green materials used by many manufacturers."

Truly green: Put your money where your mouth is and make your business truly green by investing in things like alternative energies for your own store. This type of outreach will definitely draw attention to your business as a green-oriented one. "We were the first business in our town to buy blocks of wind power for our energy needs," said Peak Sports' Katz, who just received an award and recognition for this distinction. While this does not relate to product, it sure brought this retailer's consciousness into the public's awareness.--Erinn Morgan

SNEWS® Mini-Survey underscores the mood of fear for the future linked to the economy

The SNEWS® Mini Survey that ended Feb. 17, 2009 asked, “If the economy does not improve in the next six months, do you believe additional businesses are at risk of going under?”

An overwhelming 90 percent of the responses were affirmative, while only 3 percent of all respondents felt more businesses were at risk. Just 7 percent indicated they thought that “maybe” more businesses were at risk of going under.

POWDER DAY in Park City

Local "intern" hitting the POW

Networking at the Redirect Guide Social

Local Artist getting free beer and food at the Redirect Guide's Social

Global environmental standard bluesign now on speedy growth track

A year ago, bluesign's CEO Peter Waeber held a press conference at the ispo trade show in Munich, Germany, with a smattering of curious journalists in the room who had never heard of his company.

bluesign, he patiently explained while flanked by representatives from MEC and two suppliers, is a Swiss company dedicated to addressing health and safety atrocities throughout the entire textile manufacturing and selling chain. He has been establishing its plan and making industry contacts at bluesign since 2000, a demonstration of his trademark Swiss patience, thoroughness and, in this case, confidence.

"It's a slow process," he told SNEWS® at that time. Waeber knew bluesign's time was coming.

"I have a vision and a mission," he said. "We had a vision to bring something easier to the market…. I know we can do it in a better way; however, it's not easy to motivate the chemical industry."

Time is now
Twelve months later, bluesign's time has come. Companies are being motivated, difficult or not. bluesign has more than quadrupled its membership, albeit still only 10 brands; had a 50-percent stake in the company acquired in July 2008 by Swiss SGS (www.sgs.com), a 200-year-old inspection, verification, testing and certification company; and the "bluefinder," a database for its members of processes and chemicals, will be relaunched by March 2009.

But with no time to rest, Waeber trots the globe to push membership and support. He prowled the aisles at Outdoor Retailer Winter Market in January 2009, moving from meeting to meeting, and he received a Top 25 honor as a 2009 SNEWS Power Player (Click here to see his interview and photo in a Jan. 19, 2009, SNEWS story.) Always understated, Waeber paused a moment at the show to show an edge of a smile about the award, but quickly moved on to his next meeting -- and to continue work on bluesign's future that could change the world's environment.

"We have a lot of projects," he told SNEWS. "The companies that are now members realize and they also know sustainability isn't happening overnight.

"But it's happening," he said. "We can talk and talk and talk, but now we have to take action. I'm not pessimistic at all."

All action, not just talk
bluesign (www.bluesign.com), which Waeber spells using a lower case "b," tackles the problem of environmentally unfriendly manufacturing at its root, from air emission and waste water to chemical processes and components, using systems only a long-time textile scientist like Waeber -- but one with an environmental passion -- could create. Waeber is also a chemist and outdoor enthusiast who has studied economics. He has worked at various textile mills and, before starting bluesign, was the technical director and a member of the board at Schoeller Textil AG, also in Switzerland, where the concept was born.

Said Jeff Crook, product manager at MEC, who participated in the conference at ispo a year ago, "They're focused on solutions."

"The foundation of the system is economically sustainable," Crook said. "It has to be economically sustainable for everybody in the production chain."

Another participant, Roger Yeh, president of Everest Textile of Taiwan, put it more simply, "I trust Peter."
How it works
According to the company, the bluesign standard's five principles are:
>> resource productivity
>> consumer safety>> air emission
>> water emission
>> occupational health and safety

This "gives suppliers, manufacturers, retailers, brands and consumers the good feeling of having done everything possible for the environment, health and safety," a company statement said.

There are various components -- all rather precise albeit a bit complicated -- designed to link closely the manufacturing and selling chain, create buy-in from all sides, and give each a tool to find out more to operate in an environmentally friendlier way while also being more transparent and gaining more knowledge about others in the chain.

First, there are three levels of participants:
>> Supporters are companies from the chemical and machine industry.
>> Partners are mills, manufacturers and converters.
>> Members (also known as users) are brands and retailers.

The most recent members are REI, which announced its membership on Jan. 20 and Deuter on Jan. 31. Others include Patagonia and MEC, both of which were the first, joining in May 2007; The North Face, Vaude, Helly Hansen, Hagloefs, Eileen Fisher and Boardroom/Eco Apparel.

Then, there are three systems provided by bluesign for information and transparency:
>> bluetool, a source of information for the chemical industry.
>> bluefinder, the guide for manufacturers to source better materials and mills.
>> blueguide, still in development, a tool for all member brands and retailers to help them choose better environmental sources.

Only a year away from celebrating its 10th anniversary, bluesign has goals, big goals, for the year, including 100 percent growth and opening a hub in Hong Kong. Waeber and his small team will collect a lot of frequent flyer miles to get there since partners, supporters and members don't just sign papers to join. bluesign, with a vision that reads "one world -- one standard," must in fact do lengthy inspections and analysis on-site at each potential partner and supporter, a process which can take up to a year, he said. When completed, the applicants get a thick report with recommendations for changes and a list of bad components or methods (black), a list of mediocre ones (gray) and a list of good ones (blue). Being a bluesign participant doesn't necessarily mean your company is perfect since the fact-finding systems (finder or guide) show what part of a supplier is good and what is not so good, literally grading the firm like a report card.

"It's a process," he said.

There is no way around this kind of detail because, as Waeber told SNEWS, "It would get around if it were bull."

With most of the world calling these types of practices "green," Waeber went with blue. He said blue is a more holistic color -- think of the blue sky and the blue sea, he said."

Green washing is not what we are all about," Waeber said. "We want to bring solutions on the table."

--Therese IknoianSNEWS® View: Certainly, bluesign is a business since companies pay for the report cards and screening, but in the end the process is obsessively detailed and will give all segments of the supply chain better information when they make choices. Although addressing the textile chain, such an organization -- if not different divisions of bluesign in the future -- could certainly address other segments, from hardgoods such as stoves to the likes of fitness equipment -- the manufacturing to pour steel and form plastics can't be great for our environment. With the forward-thinking and long-term thinking, bluesign could be paving the way for a more environmentally sound planet for our children and their children. --SNEWS® Editors

State of Green Business 2009: Green is Growing, But Not Fast Enough

OAKLAND, Calif. -- The second annual State of Green Business Report, created by Joel Makower and the editors of GreenBiz.com, looks at hard data behind 20 indicators to find out just how well companies are doing on addressing environmental issues.

Green business activity has continued to grow, even during a down economy, but the aggregate environmental progress being made is marginal, according to a new report, titled "State of Green Business 2009," the second annual report of its kind published by GreenBiz.com.

The State of Green Business shows that companies are making progress on only a handful of the 20 measures of performance investigated. In some areas, such as in the case of climate change, company commitments and achievements are failing to stem the overall rise of carbon emissions.

"This year's update is a mixed bag of encouraging and discouraging news," says Joel Makower, executive editor of GreenBiz.com and the report's principal author. "But on balance, despite a growing chorus of corporate commitments and actions, we're less optimistic that these activities, in aggregate, are addressing planetary problems at sufficient scale and speed.

"The report found many reasons for optimism, according to the authors. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals up the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.

The report marks the second year of the GreenBiz Index, a set of 20 indicators of U.S. business environmental progress. They include macroeconomic measures, such as carbon emissions, toxic releases, packaging materials, and paper use per unit of gross domestic product, as well as the fuel efficiency of corporate vehicle fleets, construction of green office space, investments in cleantech, and the financial costs of companies' environmental impacts.

Among the findings:
• Greenhouse gas emissions in the United States rose in 2007 by 1.4 percent in absolute terms over 2006, but shrank 0.6 percent in intensity -- that is, when measured as a percentage of gross domestic product (GDP). That's the smallest annual decrease since 2002, when intensity improved 0.4 percent.
• U.S. patents for clean-energy technologies -- wind, fuel cells, hydroelectric, tidal, and geothermal -- in 2008 were at their highest level in seven years.
• Americans are continuing their love affair with the car, and appear unwilling to give up their vehicles for the solo commute to work. Since a high of 77.8 percent in 2003, the number of solo commuters has inched down slowly to 76.1 percent in 2007.
• American industry has been doing more with less energy for decades. The amount of energy required -- in the form of electricity and fuel -- per dollar of GDP has dropped more than 75 percent since 1950.• The growth of certified green buildings, which for years had been growing from 10 to 90 percent, slowed dramatically in 2008.
• Generation of non-hydro renewable energy -- including solar, wind, and biomass -- grew nearly 7 percent in 2007 from the year before, outpacing the 2.3 percent annual growth in all electricity generation during the same period.
• The packaging intensity of the economy -- the aluminum, plastics, cardboard, and other materials used per dollar of GDP -- continued to decline slightly, as it has for the past several years.
• Over the past decade, the amount of paper used per dollar of GDP dropped by 27 percent and the amount of paper recycled rose -- also by 27 percent.
• Over the past 18 years, disposal and release of chemicals by U.S. companies decreased by 1.77 billion pounds, or 59 percent.

The report also includes the top 10 green business trends of 2007. They include the rise of energy efficiency in commercial buildings; the emergence of water as "the new carbon"'; the growth of college curricula on environmental management; growing company efforts to push environmental thinking to the rank and file; the failings of green marketing to captivate consumers; and the increased use by companies of such green design principles as green chemistry and biomimicry

Ten Steps to Sustainable Marketing in an Uncertain Economy

There's a standard journalistic trope that abounds during times of crisis: take the hot topic du jour, mash it up with something you know about, and you've got an instant article. For example: "Peanut Butter Preferences during a Global Recession," or "Sparrow Migration Patterns during the 2008 Wall Street Collapse.

"Now, after nearly a decade of build-up, sustainability and "green" were the issues du jour for much of 2007 and 2008; but with the recent market crash, the national dialogue has turned more toward keeping a roof over your head than keeping a green roof over your head. So what's a sustainable brand to do? Here are a few strategies to keep you afloat during these tumultuous times.

1. First, take pride in your sustainable brand, and know that there's a strong core of people out there who still care about sustainability and who will continue to care.

2.: If you're a "core" brand with true sustainability cred, you'll do just fine, and you'll probably even outperform the market at large. If you were just greenwashing, then now would be a good time to stop; the mass market is more concerned with "value" than with values at a time like this (no matter what they might claim on a survey), and the people who were just chasing the green trends will fall away as their 401ks collapse.

3. Be socially responsible. Talk about it. Be more socially responsible than ever. Talk about it even more.

4. Anticipate growing anti-consumption attitudes, and focus on offering a quality experience.
5. That said, affordable luxuries and "guilty" escapist pleasures will thrive in this environment, as they did during the Great Depression and every other economic downturn.

6. You've probably got less money to spend on marketing these days, but social networks are a powerful way to spread the word. Pay attention to digital outreach, and two-way communications within the digital space.

7. Don't condescend to people with heavy-handed "value" messaging,

8. Given that people will, realistically, have trouble affording you, be generous. Very generous.

9. Understand the deep roots of the sustainability movement. This will give you the deepest clues about what to do, how to express it, and what conscious consumers really want.

10.So think hard about what you're trying to sell. Question it from every angle, and ask yourself it it's truly necessary. Change is afoot.

Carbon Market Worth $118B in 2008

LONDON, UK -- Despite the slumping economy, the value of the worldwide carbon market soared 84 percent in 2008 to reach $118 billion, and could reach $150 billion this year, according to New Carbon Finance.

Some 4 billion tonnes worth of carbon allowances changed hands last year, a 42 percent increase over 2007, the research firm found. The bulk of the transactions were European Union Allowances (EUA), representing 70 percent and 80 percent of the value.

A growing interest in secondary Certified Emissions Reductions (CER) for the Clean Development Mechanism (CDM) boosted their market share from 8 percent in 2007 to 13 percent in 2008. The credits are eligible for compliance under the European Union Emissions Trading Scheme (EU ETS) and Kyoto Protocol, as well as potential Australian and North American trading programs, according to New Carbon Finance, which is a division of New Energy Finance.

A smaller number of credits from the CDM entered the United Nations crediting approval process in 2008 than in 2007, leading to about 30 percent less purchased on the primary CER market. More projects entered the pipeline in 2008 but the number of smaller projects grew, mostly related to energy efficiency and renewable energy.

New Carbon Finance expects moderate growth in the European allowance market in 2009 but most growth will stem from more liquidity in the secondary CER market

REI Adds bluesign Standard to its Product Sustainability Strategy

Recreational Equipment, Inc. (REI), a national retail cooperative providing quality outdoor gear and clothing, today announced its membership with bluesign technologies ag allowing the company to use the bluesign® independent standard as part of its product design and sourcing process.

Founded in 2000 in Switzerland, bluesign is an approach to product sustainability that considers textile environment, health and safety issues from the ground-up, addressing the use of toxic-free ingredients, efficient production and resources, and informed product and process design. Since its development, the standard has been adopted by a number of worldwide textile manufacturers and apparel companies. Certified mills that comply with the standard are more efficient and have less environmental impact, while their operations comply with worker health and safety standards.

REI considers the bluesign standard as the strongest global solution available to proactively address textile environmental, health and safety strategy. Further, utilizing the standard is an important step in managing the substances used to create products the co-op sells under its branded labels.

With this announcement, the design teams for REI branded apparel and cycling brands will begin to use the bluesign standard to help make more informed textile supply chain choices. For example, designers will utilize the standard in making yarn, fabric and dye decisions and in the selection of mills and production factories. This approach will provide greater supply chain transparency in support of REI’s goal of reducing the environmental impact of its products.

REI has a number of efforts in place to reduce its environmental footprint and increase its product stewardship involvement. For example, the co-op is currently working with other outdoor brands and retailers to help drive positive, lasting change within the industry. The co-op was a founding member of the Outdoor Industry Association’s (OIA) Eco-Working Group, an industry organization establishing a common framework to measure, report and ultimately improve on the environmental impact of outdoor gear and clothing. Today, the group includes more than 100 brands, manufacturers and others working toward a mutually agreeable definition of what “green” means for products and apparel. bluesign’s methodology covers a significant portion of the material impacts that the OIA Eco-Working Group is considering.

For more information about REI’s stewardship efforts or to access REI’s annual stewardship report, visit http://www.rei.com/stewardship.

About REI
REI’s in-house team designs and develops award-winning gear and apparel for camping, hiking, cycling, urban lifestyle, travel, and general outdoor recreation. The brands REI and Novara are private labels and sold exclusively through the co-op’s retail stores, online at www.rei.comand through its catalogs. REI is a national outdoor retail co-op dedicated to inspiring, educating and outfitting its members and the community for a lifetime of outdoor adventure and stewardship. Founded in 1938 by a group of Pacific Northwest mountaineers seeking quality equipment, REI is committed to promoting environmental stewardship and increasing access to outdoor recreation through volunteerism, gear donations and financial contributions.

Climate Change Lessons from the Slopes

A recent study presented at last month’s American Geophysical Union conference holds chilling news for the $2 billion U.S. ski industry: Climate change might end skiing in Aspen and Park City by 2100.

It stands to reason that if the snow pack dries up, the ski industry could, too. But the study from Mark Williams and Brian Lazar could be a harbinger of things to come for other consumer-facing industries as well. As one of the first industries to face climate change head-on, skiing provides three key lessons for other sectors.

Learn the Terrain: Know and Promote the Facts

Climate change myths abound. On a recent Google search for “climate change facts,” five out of the first 11 hits led me to websites that downplay or contradict the science. Media watchdog groups substantiate my findings: According to Media Matters, recent content by CNN, the Wall Street Journal, Fox News, and other mainstream papers and broadcast outlets have contained inaccurate and flawed information about climate change.

In light of this misinformation, consumer-facing industries have a responsibility to get their facts straight and share them with their customers. According to the best assembly of experts on the subject -- the UN’s Intergovernmental Panel on Climate Change -- here’s what we know: The climate is destabilizing, this destabilization is driven by greenhouse gas emissions, and humans are directly responsible for causing those emissions (see sidebar).

With this gap between public knowledge and the scientific facts, one of the most powerful things companies can do about climate change is use their communication channels to set the record straight. In the ski industry, outdoor apparel manufacturer Patagonia, which has an extensive "environmentalism" section on its website, has been doing this for years. By demonstrating a deep-rooted commitment to environmental stability, Patagonia has enjoyed the commercial benefits of long-term customer loyalty, and the ethical benefits of being on the right side of science.

There is a business opportunity for virtually every company to use their existing communications efforts to give their employees and customers a compass for climate change, which is shaping up to be one of history's greatest social threats. Since people need accurate information to make good decisions, this is, for many consumer-facing businesses, the easiest and most important thing they can do.

Go Out of Bounds: Look Outside Your Company’s Operations

In many ways, it’s logical to focus efforts on reducing emissions from your company’s internal operations: Internal emissions are the easiest to measure and control, the effort yields useful information about costs and risks, and committing to operational reductions is important for credibility.

But as the ski industry has demonstrated, there are important opportunities to look outside the scope of your company’s boundaries and consider ways you can help reduce emissions on a broader scale.

For example, the energy bar company Clif Bar has supported the formation of the collaborative initiative Keep Winter Cool, which aims to raise public understanding of global warming. In an effort to take responsibility for their customers’ drives to the mountain, California’s Kirkwood ski resort partnered with SnowBomb, a resort information and discount portal, to develop user-friendly rideshare schemes. Enabling conservation-oriented consumer behavior is one of the most important steps companies can take to combat climate change.

At the same time, a company’s operations have less influence on the customer than the customer’s experience with the company’s products, which generally takes place among an ecosystem of complimentary goods and services from other companies -- in the case of skiing, that includes the drive, lodging, gear, and more. Consumer-facing companies therefore have a great opportunity to meet the customer where they use their products, particularly by partnering with other companies that are operating in the same environment.

While the previous examples are customer-focused, you can extend the influence of your company by using whatever assets have the most reach. For instance, Colorado’s Aspen Skiing Company, which is influential in its community, has directed its resources to partner with utilities to deploy new community solar arrays. The company also has lobbied for policy change by filing federal amicus briefs and testifying before Congress about the expected effects of global warming on the ski industry.

These early initiatives by the ski industry are just the beginning; there’s a whole wilderness of opportunity for other industries to develop climate change solutions by venturing beyond the boundaries of their own operations.

Proceed with Caution: Abate, Abate, Abate

In climate change, we talk about adaptation -- preparing for change -- while committing to abatement -- doing our best to prevent things from getting worse. There is a multi-decade lag between emissions and their effects on the climate, so we are almost certainly locked in to at least 2 degrees Celsius of warming. Some adaptation to climate change will be necessary. For the ski industry, making more snow and employing new business strategies will be the keys to survival for many resorts. Other companies will make similar plans for adaptation. At the same time, it’s critical for companies to maintain an unwavering focus on reducing emissions.

There are three reasons for this. First, adaptation is perilous. According to most predictions, climate change could easily push currently stable ecosystems across boundaries. For instance, as the climate warms over time, the thawing of ice and tundra could release huge amounts of additional emissions. Yet, no matter what the pace, climate change effects are irreversible. So while technological solutions like snowmaking may provide a quick fix to the narrow interests of some, they won’t replenish the breadth of lost ecosystems and their natural services in general.

Second, adaptation is a classic “win-lose” game, where people and companies will compete for fewer resources (especially water) and defend the most fertile real estate, while more energy will be needed to resettle and distribute goods and services. Such a process is inherently disruptive, brings about sociopolitical instability, and is likely to leave the vulnerable behind.

The last reason companies need to focus on abatement, not just adaptation, is that every incremental rise in average global temperatures is more menacing than the previous one. It is not about whether climate change will occur, but to what extent, so every abatement effort counts.

While skiing is one of the first industries forced to deal with climate change so directly and comprehensively, consumer-facing companies in other industries will face the same challenges soon enough. These lessons from the slopes will help all businesses build a stable and predictable future.

Is Now a Good Time to Launch?

By Marc Karimzadeh, Julee Kaplan

A depressed economy, little prospect of financial backing and fewer retailers willing to take chances. Is this the worst time for young talent?

That’s debatable. Some industry experts deem this a particularly tough time for newcomers, while others sense opportunity for designers with a fresh vision.

Ann Watson, vice president and fashion director of Henri Bendel, said the store’s policy of finding and supporting young designers isn’t changing.

“If they are going to do it, they all need to have done their homework and be totally buttoned-up,” Watson said. “The collection has to have a distinctive point of view, and they need to know who their customer is. There has to be a strong perceived value, no matter what the price point is. I think there is an opportunity for any designer to really step out and be distinctive and clarify their voice and connection with customers. It’s not a time for somebody to launch a line that is more of the same thing. Every item has to count.”

Robert Burke, founder of the New York-based consulting firm Robert Burke Associates, agreed. “We want to encourage young talent and growth in this industry, but there has never been a more difficult time in retail. As a result, buyers are reducing their buys and are probably being less experimental, and from that standpoint, economically, it’s more difficult than it has ever been before.”

Simon Collins, Dean of Fashion at Parsons The New School for Design, said that in time even the recession can present opportunity.

“Design is traditionally very tough at the beginning of a recession, when everyone is rolling back and not forward, but toward the end of recession, it becomes more important again, because all these companies that are suffering at the moment can eventually only survive by providing something new, and the only way to do that is with design,” he said.

And if they can do it right, now can be a time for new brands to thrive.

“This is a time when the market is forcing designers to think smaller to get it right. Once you get it right, then you can go globally,” Collins added. “Every store that is open right now still wants to put things in-store, so for a brand with a genuine point of view and real direction, there is opportunity.”

Ken Erman, chief executive officer and co-founder of L.A.M.B., sees that opportunity on a global level for his newest venture. The L.A.M.B. collection, which he runs with singer Gwen Stefani, is still a hot line in the contemporary market, selling at a range of retailers from Saks Fifth Avenue, Bloomingdale’s and Nordstrom to Big Drop and Atrium.

Erman also just launched a new label, Truth & Pride, for holiday selling that is sold at Nordstrom, as well as Henri Bendel and Atrium in New York. But his plate isn’t entirely full. That’s why he is launching another label, called Seventy Two Changes, with the Taiwanese pop star Jolin Tsai.

“It’s not about partnering with a celebrity for us,” Erman said. “We already have a great thing with L.A.M.B., but we wanted to do even more to inspire women on a global scale, and so many girls look up to Jolin. She is huge in Asia.”

Seventy Two Changes, which is named after one of Tsai’s best-selling songs, plans to launch a full contemporary sportswear line, designed and inspired by the looks for which Tsai is known. The brand will launch in the U.S. in about 10 to 20 doors for the first season and across China for fall selling.

“We want to keep the distribution very limited at first,” Erman said. “It’s all about creating a demand for the product.”

Seventy Two Changes is different from L.A.M.B., even though they both serve the contemporary market. While prices have yet to be determined for the Seventy Two Changes line, Erman said it would be priced lower than L.A.M.B. in order to make it accessible to a wider range of consumers.

For the launch, the line includes a mix of club-appropriate and streetwise items such as a black T-shirt dress accented with bright blue and silver sequin details, structured tuxedo jackets and vests with beading details at the shoulders, lightweight wool plaid tops, leather leggings with zipper details at the ankles, silk chiffon printed tops and dresses, a taffeta motorcycle jacket and an asymmetrical bomber jacket.

Erman and Barbara Lin, president of the brand, said they work closely with Tsai to make sure the collection is to her liking.

“We conference with her all the time, but we also took her shopping in Tokyo and went through her closet at her apartment to get a handle on her style,” Lin said.

Much different than Seventy Two Changes, 23-year-old Kimberly Tebele has her own vision for her new contemporary label, Kimberly Taylor. The daughter of Irwin Gindi, a former owner of the Century 21 chain of off-price designer stores, Tebele said she always knew she would one day do her own line.

“My mom used to yell at me because I would wear these supercasual cotton tank tops with my really nice, dressy skirts,” Tebele recalled. “So that’s when I decided I would design a line of silk basics that were comfortable but also look dressy. I want to be the American Apparel of silk.”

Her idea was to create a line of luxurious staples, rather than trendy items — there’s the basic silk tank top in colors such as royal blue, deep purple, bright red and black and white. There’s also silk taffeta skirts, long and short strapless gowns, a classic shift dress in black and gray with a pop of red around the waist, a tunic and a pair of soft silk drawstring shorts. The line wholesales from $64 to $108 and has already been picked up by Twist and Breeze in Brooklyn and Henri Bendel, where Tebele is planning a trunk show early next month.

“These are difficult times right now, but I think that my clothes are classic investment pieces, which feel good to wear and are not going to break the bank,” she said. “They can be worn from the beach to a cocktail party. They are clothes to carry you through, which has been a good thing in a recession.”

A third new label to launch in the contemporary sector is Charley 5.0. While the brand will land in select stores next month, its parent company, Salt Jeanswear LLC, is thinking big for fall — moving from primarily a denim label to a full contemporary sportswear brand.

“We are all about staying on top of the trends and translating what we do with denim into a full collection,” said Susan Dimeo, director of sales at Charley 5.0. “It’s all about high style for a great price.”

For fall, the collection is focused on boho with a modern edge, such as a long denim halter dress and jumper, cotton blouses, leggings, pencil skirts and jackets. The fabrics range from lightweight stretch chambray to silk and cotton with treatments including tie-dye, bleaching and distressing. Wholesale prices range from $53 to $126. The collection has already been picked up by Neiman Marcus, Scoop, Henri Bendel and Planet Blue.

While Dimeo said she would eventually love to build Charley 5.0 up to a $15 million business, she said she isn’t aiming that high in this economy.

“The most important thing right now is to grow this into a healthy business, have a great product with a great fit and grow from there,” she said. “Our goal is to come out stronger when the recession is over.”

Press Release - LOCALS HAVE MORE FUN ANNOUNCES ITS OUTDOOR RETAILER CARBON OFFSET PROGRAM

For Immediate Release
Locals Have More Fun ®
Brian Kahn
4229 Southridge Ct.
Park City UT 84098
435-659-6217
brian@localshavemorefun.com

Park City, UT, January 15th, 2009 — Locals Have More Fun will be offsetting 100 Tons of carbondioxide emissions during the 4 day Outdoor Retailer Winter Market in Salt Lake City, UT. This translates into 200 trees being planted with the National Forest Foundation as the Park City, UTbased eco friendly lifestyle line lives up to its byline: “Protecting the Places We Live and Play™”.

“Depicting the ‘locals’ lifestyle comes with a price”, says owner Brian Kahn. “That price isprotecting the very lifestyle that locals and destination town tourists know so well. We realizedthat much of the land that destination towns are in or are adjacent to are also National Forests.Planting trees would be a great way to offset our carbon footprint and increase thesustainability of our playground.”

Locals Have More Fun will give away reusable cups each day at 1:30pm. The cups will beimprinted with: “100 Tons Equals 200 Trees”. “What better way to kick off “social hour” thancoming by and picking up a cup that is eco friendly and represents a carbon-offsetting tree!”

Locals Have More Fun is a member of 1% For the Planet. Members must donate at least onepercent of sales to environmental non-profits. Mr. Kahn worked with Jeff Olson of the NationalForest Foundation to come up with a fun, unique way of promoting the National Forest Foundationwhile satisfying Locals’ 1% pledge.

“When Mr. Kahn told me that Locals Have More Fun not only wanted to donate to but alsopromote the National Forest Foundation and our carbon offset program, I was very excited”,says Olson. “With budget cuts, it isn’t easy for us to hit all of the events that cater to our targetmarket. Locals Have More Fun and their OR Booth provided a great outlet for the NationalForest Foundation and information related to our carbon offset program.”

Founded in 2006, Locals Have More Fun is a sustainable clothing business depicting the locals' lifestyle. The company focuses on outdoor retailers who understand the value of outdoor activities, maintain environmentally friendly business practices, and promte local small business initiatives. Locals Have More Fun products are currently available at retailers in Colorado, Nevada, New Mexico, and Utah. The company's headquarters is located in Park City, UT.

For more information, interviews and images, please contact Head Local, Brian Kahn

When: January 22-25, 2008
Where: Booth Br 724, Satl Palace Convention Center, Salt Lake City, UT

Show information: http://www.outdoorretailer.com/
National Forest Foundation: http://www.nationalforestfoundation.org/
1% For the Planet: http://www.onepercentfortheplanet.org/

OIA Report - 2008 Outdoor Foundation Recreation Participation Study

The 2008 Participation Report

November Outdoor Sales Slow, Accessories Remain Bright Spot

The difficult economic situation slowed outdoor industry sales in November, according to the most recent edition of The Outdoor Industry Association (OIA) Outdoor Topline Report, produced for OIA by the Leisure Trends Group.

According to The OIA Outdoor Topline Report, retail sales for all core outdoor stores (chain, internet, specialty)* fell 11% in dollars ($407,383,909) compared to November 2007($458,334,314), the first month of overall dollar sales decline since the recession started in December 2007. All three store channels and all four major product categories (equipment, equipment accessories, apparel and footwear) declined in November.

The day after Thanksgiving has long been the traditional kick-off of the Holiday shopping season. This year, Black Friday occurred on November 28th, leaving only three big shopping days in November. Black Monday, traditionally the biggest day for Internet deals and sales, occurred on December 1st, removing those online sales from November altogether. It remains to be seen how much of a boost Black Monday sales will give December, but the timing could only hurt November’s tally. Last year, Black Friday fell on November 23rd and Black Monday fell on November 26th.

Internet sales saw their first month of negative sales growth since the OIA Topline began tracking online sales in 2005. The channel declined 7% in overall dollars compared to November 2007. All four major product categories slid in November. Core outdoor chain stores lost 19% in overall dollar sales compared to November 2007, with declines coming from all four product categories. Specialty stores fell 8% from last November, as all four major product categories suffered losses.

All paddle product sales from all three channels (specialty, chain, and internet) fell 16% in units and 19% in dollars with retail prices dropping 4%. All three store channels declined in November, suffering across-the-board losses compared to November 2007. However, November is a very small month for paddlesport sales, accounting for less than 3% of each year’s total. Year to date, overall dollar sales were down just 2%.

Several bright spots emerged in November. Looking at all three channels, small items such as water bottles, headwear and handwear increased sales. Winter boots also fared well; the category grew 6% compared to last November.

November sales account for about 9% of a typical year’s total dollars. This November’s declines were not enough to affect the entire year. Year to date, all three channels together were up 5% in total unit sales and 6% in dollar sales. In YTD dollars, all equipment increased 8%, equipment accessories 10%, apparel 5% and footwear 4%. All three store channels’ YTD dollar sales remained in the black through the end of November.

SnowSports Industries America's SnowSports Consumer Panel Tells All

MCLEAN, Va., -- SnowSports Industries America (SIA) released information from their SnowSports Consumer Panel. Overall, skiers and riders are concerned about the economy but they will participate as they always do, particularly if the snow continues to fall. Research shows that snowfall is a much better predictor of participation and sales than the economy. Despite economic and logistical barriers, so far this season the snow is excellent and snow sports sales of equipment, apparel and accessories were up 9% driven by carryover sales. The results of the December 2008 SIA Consumer Panel and the SIA Retail Audit for August through November sales indicate that skiers and riders may pinch their pennies on the slopes this season, but they will be on the slopes.

Top-line findings are:

-- Dismal economic conditions will affect the majority of snow sports consumers but they plan to limit spending by pinching pennies, not by canceling their plans to ski and ride this season.

-- Snow Sports consumers are hunting for bargains and buying when they find them.

-- Skiers and riders use the Internet to research gear and ski vacations before they purchase and more of them are purchasing online this season.

-- Airline bag fees are keeping 1 in 5 skiers/riders from taking their gear with them when they fly.

-- Half of snow sports consumers do not know they can ship their gear cheaply and efficiently to their destination using FedEx(R).

The December 2008 SIA Snow Sports Consumer Panel Results

The first SIA Consumer Panel Poll of the 2008.09 season was conducted in December 2008 and the results indicate that skiers and riders will be affected but not deterred by dismal economic conditions. The SIA Panel responses dovetailed nicely with the information SIA receives from monitoring retail sales across the country: that skiers and riders plan to spend their money on snow sports this year, but they will be pinching their pennies.

"I'm skiing as long as I have some kind of gainful employment and that seems likely for the next year or two while I weather the recession," said a SIA Panel member.

We asked the SIA Panel how the economy was affecting their snow sports spending, about what types of plans they were making to ski and ride this season, about their Internet habits, and about their willingness to take their skis and boards with them when they fly. The Panel told us they may hold off on equipment purchases during these difficult economic times but the majority plan to spend about the same amount they spent last year. The SIA Snow Sports Consumer Panel consists of core (those that participate reliably multiple times each season) participants, most own their own equipment, almost all plan to ski or ride this season on multiple occasions. Overall, Panel members' responses match up well with the data coming out of retail sales, which show that bargain hunters were out in force at the pre-season sales and they were happy to buy equipment on sale and equipment for their kids, but they were holding off on purchases of this season's equipment models.

Each year, about 1 in 6 Panel members purchase new skis or a new board, but they buy accessories and apparel every year. This season, about one-third of our Panel members say that they plan to hold off on buying new equipment this season specifically because of economic conditions. Last season at this time, 28% of panel members told us they would not purchase new equipment because they "didn't need anything new." Their reasons for not buying equipment have shifted somewhat, but the number of consumers who will not buy has not shifted dramatically.

Most Panel members use the Internet to research their snow sports vacation options and their equipment before they buy. Surprisingly, they use the Internet far more to research products and services than they use it to keep up with athletes and events or to meet other people interested in snow sports. They are clicking to buy more frequently too; online retail dollars sales are up 13% compared to August through November sales in 2007.

August to November 2008 snow sports retail sales were primarily driven by pre-season clearance sales. Sales of carryover gear accounted for a significant portion of snow sports equipment sales. Sales like the "SkiBonkers" sale in Seattle, which are dominated by leftover inventory from the past season, help consumers find bargains on carryover items. Carryover is officially defined as any item that sells for less than the average retail cost for that item. Carryover accounted for 30% of skis, 23% of snowboards, 21% of ski boots, and 23% of snowboard boots sold August to November 2008. Compare that to last season's August to November results when carryover sales accounted for just 20% of skis and 21% of snowboards sold and millions fewer dollars spent. Sales of current year model alpine ski equipment paint a different picture of sales with most ski categories down significantly. Ski prices are up across the board but dollar sales of skis (including carryover) are down almost 7% despite the increase. Excluding carryover sales, current model alpine ski sales are down about 16%.

Change Dollars $Dollars Sold Aug - Nov Aug - Nov 2007 to Avg. Price Avg. Price Equipment Category 2008 Aug - Nov 2008 Nov 2007 Nov 2008 All Alpine Skis $79,377,471 -6.54% $327.18 $318.89 All Carryover Skis (Flat and Systems) $18,374,413 39.77% $231.97 $246.26 Junior Skis $5,295,786 18.73% $128.54 $148.45 All Snowboards $49,979,910 2.29% $251.22 $251.23 Carryover Snowboards $8,480,397 40.73% $158.82 $175.48 Junior Snowboards $3,214,807 1.54% $149.26 $157.89 *All Women's Products $253,441,281 0% $110.80 $105.88 All Apparel $402,876,770 2.36% $127.01 $119.58 All Accessories $247,886,072 7.80% $28.99 $30.67

Source: SIA Retail Audit 2008.09 August to November Sales, All Stores (includes Specialty, Chain, and Online Retail) *All women's products does not include carryover equipment, apparel, or accessories

Snow sports consumers are using the Internet more and more every season to research and compare gear, to plan their vacations and to buy gear. Last season, Internet sales increased 46% in dollars to $492 million and that trend continued in the early part of the 2008.09 season. In fact, 70% of SIA Panel members told us they use the Internet to research and compare equipment, and 63% said they like to plan their snow sports vacations online. Just a few use the Internet to meet others interested in snow sports and 4 in 10 keep up with their favorite professional skiers and riders online. This shift in consumer behavior presents excellent marketing and revenue opportunities for both manufacturers and retailers looking to capture their target audience by providing online consumers with good information about their gear and giving them the opportunity to buy the gear immediately after they make their decisions about which gear they would like to purchase.

The vast majority of snow sports core participants own their own equipment and most like to take it with them when they fly to a ski/ride destination. Unfortunately, the airlines have recently begun charging high fees for extra bags, particularly if they are oversized or overweight. "On American Airlines, for example, a coach customer checking skis, a boot bag and a suitcase for clothing would pay $140 each way in luggage fees. Skiers who can cram all their clothes into a boot bag -- and keep it under 50 pounds -- can avoid the $100 fee for the third bag." -- David Koenig, Associated Press, published November 28, 2008 at 12:05 a.m. Skiers and riders have been hit hard by these fees and many are choosing not to take their equipment with them to save a few bucks. In fact, 20% of our Panel members said that they would not take their equipment with them on a plane this season due to the increases in baggage fees. There are alternatives to bringing gear on the plane and about 60% of core participants know that they can easily and inexpensively (far cheaper than renting equipment) Ship Your Gear using FedEx(R). For more information about the Ship Your Gear Program, visit SnowLink at snowlink.com.

FedEx Ground(R) Sample List RatesAll sample rates* are based on a standard ski/snowboard bag (72" x 12" x 8"), 25 lbs and may change at ship date.

Ground Origin Destination** Transit Times FedEx Rate Boston, MA (02128) Aspen, CO 4 $32.44 Dallas, TX (75261) Breckenridge, CO 2 $23.49 Miami, FL (33102) Keystone, CO 4 $32.44 New York, NY (10001) Steamboat Spring, CO 4 $32.44 San Francisco, CA (94128) Vail, CO 3 $23.49 Boston, MA (02128) Deer Valley, UT 5 $38.10 Dallas, TX (75261) Deer Valley, UT 3 $23.49 Miami, FL (33102) Park City, UT 5 $38.10 New York, NY (10001) Park City, UT 5 $38.10 San Francisco, CA (94128) Salt Lake City, UT 2 $20.80 Boston, MA (02128) Heavenly, CA 5 $38.14 Dallas, TX (75261) Squaw Valley, CA 3 $23.49 Miami, FL (33102) Squaw Valley, CA 5 $38.14 New York, NY (10001) Kirkwood, CA 5 $38.14


MethodologyUsing the SnowSports Consumer Panel, a product of SnowSports Industries America (SIA), an online survey was sent to panel members on December 4, 2008. The objective of the survey was to determine how poor economic conditions, high baggage fees and the Internet affect the spending habits of snow sports consumers. The survey was sent to 3,201 panel members, with a total of 241 responding for a margin of error of + or - 3%.

OIA TOPLINE NOVEMBER 2008 INTERNET

OIA TOPLINE NOVEMBER 2008 INTERNET