To the surprise of many visitors who may have believed that this year's edition of the OutDoor show in Friedrichshafen suffered from weaker attendance, its organizers again presented a slight plus for the visitors who showed up at Lake Constance.
According to the official figures provided by Messe Friedrichshafen, 21,730 visitors came to Friedrichshafen from July 12-15 to see a record number of 907 exhibitors. This means that the number of visitors was slightly up by 210. According to German guidelines, show operators count entries per day.
At a time when some markets are deeply in trouble with the macroeconomic environment, it is interesting to have a close look at the breakdown by countries that sent visitors to the northern shore of the lake: The strong presence of Germany remained almost unchanged compared with the previous year, with a strong share of 40.48 percent of all visits. At a significant distance, Switzerland continued to be the second-most-important country with a share of 10.04 percent, down from 10.16 in 2011. Italy defended its role as No. 3, but suffered from the very challenging situation at home: The Italian share of visitors slipped from 6.97 to 6.09 percent.
All the following countries defended their position in the last OutDoor's top-10 ranking compared with the previous year; France and South Korea swapped ranks 5 and 6. Italy was followed by Austria (5.15%), France (4.18%), South Korea (4.10%), the U.K. (3.02%), Russia (2.55%), the Netherlands (2.06%) and the Czech Republic (1.86%). While some of these nations lost some share, basically insignificantly, some countries gained weight, including Austria, South Korea, Russia and the Czech Republic. Most important to mention are France (+0.47 percentage points) and the U.K. (+0.4 percentage points).
In spite of the satisfactory figures, this year's OutDoor was apparently marked by a lower dose of enthusiasm than in the years or even decades before – for various reasons: the economic troubles within the Eurozone, the unfavorable weather patterns of last year and excessive inventories. Big and small brands alike are deeply concerned about the economic situation in Southern Europe, notably in Italy, which is the largest outdoor market in that region.
Eddy Codega, the chief executive of Camp, who is basically satisfied with his overall sales, admits that the situation in his home country is “very tough.” Heiner Oberrauch, president of Italian-based Salewa, is concerned about the financial burden imposed by the government on the citizens to get the public budget in balance. Oberrauch expects that many Italian families will suffer a loss of a couple of thousands of euro of spending money, which will mean postponing purchases, for example on new footwear and apparel. Arne Arens, the chief of The North Face in Europe, also says that the development in Italy and in Spain is difficult, and he is curious how consumers' behavior will develop in the next 12-24 months. In times of a shrinking market, TNF expects an ongoing concentration of retailers on fewer and bigger brands.
The overall challenging situation in some markets coincides with an unusual amount of unsold inventories both at retail and in the vendors' warehouses. Rolf Schmid, chief executive of Mammut Sports Group, points out that the current situation of overfilled warehouses can be only partly explained by a bad winter season, since this is not the first time that the industry had to face meager snow conditions.
Instead, Schmid sees an important reason for the currently excessive offer, which is endangering the pricing, to some extent like in the financial crisis of 2008-09: At that time, the cautious purchasing policies of the brands led to a massive reduction of manufacturing capacities in the Far East. When the situation in the Western Hemisphere relaxed again, there was a lack of capacities and the brands reacted quickly by buying as much and as early as they could. This reaction led to high inventories and to a lack of capital in the industry due to excessive purchasing.
What are the plans to get rid of the overstocks? For basic, unseasonable items, the logical solution is a deal with the retailers whereby they will get them at a substantial discounts if they also commit themselves to large quantities for future collections.
Without pointing to specific vendors, some retailers, notably in central Europe, are already mad at the vendors, because more and more online shops are popping up that have not been known as established online retailers. Specialty outdoor retailers suspect the brands to sell to “anybody” to get rid of the stocks, and that this policy will endanger the price structure in the outdoor category, which used to be stable or even healthy over the past years.
The vendors themselves have gotten creative in their efforts to reduce stock excesses, mainly by spreading the inventories over the whole globe. An immediate response to the situation could be the new opening of factory outlets, but the big brands hesitate to do so. Columbia, for example, does not want to exclude new outlets in the future, but Christian Finell, chief of Columbia Sportswear in Europe, the Middle East and Africa, sees no need for immediate action in the direction to increase its current number of outlets in Europe. The North Face does not intend to open new outlets this year and counts on its preferred retailers to run special campaigns to sell overstocks.
Typically, most brands place their inventories on the big core markets where the price structure has remained relatively stable. Instead, companies are now trying to get the stocks cleared in emerging markets. It may sound ironic, but Columbia did sell some inventories to its Greek distributor. Since the buying power in the Hellenic market is on its knees anyway, it sounds smart to sell into a troubled country where Western European price lists are elusive anyway at this point. The North Face tried the same thing, actually, but, of course, the volume has not been massive in a small country like Greece.nniversary edition of the show will take place from July 11-14.