Fresh Powder

Carving Up New Slopes

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It's a slippery slope.
  • Why it matters

    Why it matters

    Declining sales, warmer winters and stiff competition are threatening winter sports equipment makers and forcing them to diversify.

  • Facts

    Facts

    • Finnish company Amer Sports owns the leading Atomic and Salomon ski brands.
    • The company earns around €400 million ($490 million) per year from its ski equipment business, a fifth of its overall revenues.
    • Worldwide sales of skis have stagnated at about 3.3 million pairs per year.
  • Audio

    Audio

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Making skis is a multi-step process, involving sawing, glueing, pressing and polishing pieces of wood, plastic and metal. Michael Schineis enthusiastically explains these steps to visitors at his ski factory in Altenmarkt near Salzburg, Austria.

Mr. Schineis is the head of the winter sports division of the Finnish company Amer Sports, the largest producer of skis in the world.

Its subsidiaries include the leading Atomic and Salomon brands, for which the Altenmarkt factory turns out half a million pairs of skis every year. Amer is also number one in the boots and bindings business.

“It’s getting harder and harder to survive just making skis,” said Mr. Schineis.

Amer earns around €400 million per year with its ski equipment business, almost a fifth of its overall revenues. In view of the lack of snow during recent Central European winters, there is no reason to expect a sharp upturn in growth.

A price war is raging in the sports equipment business too, and skiers increasingly rent skis at the resorts instead of bringing their own. This has led to a worldwide stagnation in sales at around 3.3 million pairs of skis per year.

On the other hand, people continue to buy boots, helmets, jackets and goggles. Helmets, for example, are now outselling skis, with around five million per year flying off the shelves. And almost four million pairs of boots pass across store counters. These can also be rented, but most people would rather not do so for hygiene reasons.

To combat these trends, Atomic has developed a full line of winter sports wear products. The company boots, helmets and goggles were introduced to stores this fall.

“We intend to outfit the customer from head to toe in a strong brand,” says Mr. Schineis.

“We intend to outfit the customer from head to toe in a strong brand.”

Michael Schineis, Amer Sports

But Atomic and Amer’s competitors are also shifting their focus. Whether Rossignol, Völkl or Head, almost all leading snow-sports equipment brands have set their sights on skiers’ clothing budgets. Most ski jackets cost €200 ($250) or more and are therefore just as expensive as skis, although they are produced more cheaply.

Ski apparel specialists such as Schöffel and Bogner dominate the market. And many items have remained unsold since last year’s warm winter.

“This year we grew only in the outdoor area,” says the apparel maker Peter Schöffel. For the first time, the entrepreneur is offering a line of children’s clothing to him the brand gain more floor space in stores.

Atomic has no choice but to start small in the clothing business. Mr. Schineis said that the company’s jackets and pants only launched in 20 to 30 stores to start with.

 


Video: Atomic introduces its Freeski Athletes 2015.

In addition, the manager is building up Amer’s cross-country ski business – cross-country boots and bindings in particular. More and more people are taking up the high-energy sport, which has long been dominated by mid-sized companies such as Dynafit.

But the ski sector has its advantages. “We are pretty much independent of economic cycles,” says Mr. Schineis.

 

Joachim Hofer covers the outdoor and recreational sectors for Handelsblatt. To contact the author: hofer@handelsblatt.com

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