Tough Times Ahead for Trail Running?

If the release of the third quarter financial results of two outdoor retail conglomerates yesterday is indicative of outdoor industry as a whole, the industry and, in turn, outdoor sports may be headed for tough times. For starters, Montrail’s parent company Columbia Sportswear reported that while there was no year-over-year change in quarterly Montrail sales ($2 million in both ’07 and ’08), the January 1 to September 30 numbers for both years show 9-month Montrail sales fell 15% from $11 million to $9.3 million. Similarly, Deckers Outdoor’s results note that its Teva brand sales were flat year-over-year for the third quarter. However, sales of Teva’s sandals were down and results only remained flat due to the introduction of close-toed Teva models within the past year.

It remains to be seen whether the results of these two brands are indicative of a slowdown in the outdoor industry as a whole. Neither is it known what impact such a down turn would have on core outdoor and fitness brands’ sponsorship of races and ultrarunners (big sponsored teams, small teams, individual sponsorship), not to mention the effects on product development, the elimination of troubled companies (there’s a great diversity of trail shoe companies at the moment), and additional barriers to outdoor start ups, which often produce some of the most innovative gear.

We here at iRunFar.com can’t imagine not running due to a slow down in the economy. Reduced to its basics, running is a fairly inexpensive sport requiring only occasional replacement of shoes, infrequent replacement of clothing, and rare replacement of gear… if the gear is even necessary. We can, however, imagine entering or, at least, traveling to fewer races.

What do y’all think about the possible slow down in the outdoor industry? Is it happening? Anyone have thoughts on what the effects of such a slow down would be on trail running? Any of the outdoor industry folks care to chime in? (You can comment anonymously or contact iRunFar for to share an anonymous tip, if you prefer.) How ’bout our retail readers… what’s life like at the sales rack and register these days?

On the runner side of things, have you or will you alter you running or racing due to the current economic debacle?

There are 24 comments

  1. MN Ultra Runner

    Interesting data, not surprising though in today's economic times. I would imagine the running/outdoor industry will mirror many others…luxury items will slow dramatically until the economy recovers. The question is how many of the specialty companies that provide so many great products will be able to survive until that recovery?

  2. slowrunner77

    hopefully, there are enough races close by that myself, and others wouldn't have to forgo racing for monetary reasons, just stay closer to home…less destination races, perhaps. the other side of it is race directors struggling to make ends meet. my favorite trail race of 2008 will not be held again, mainly due to money. THAT sucks!

  3. Grae Van Hooser

    Funny you should bring this topic up. I was just talking to my wife today about buying stock in VFC next week. Although their stock is "somewhat" in the gutter like everyone else, their 3rd quarter profit take from the same as 07' is up 17%. And looking at the line of TNF clothing and trail shoes over the past several years, I can see a continued diversity and improvement that many would agree is a positive. As we have discussed previously about Columbia in particuliar, economic conditions aside, they are probably somewhat a victum of a poor strategy. When they aquired Montrail, I think the debt with them was about 15 mill.Future quarters failed to earn a profit, they appear to cut the shoe line down and had some models that didn't pan out due to poor design or other problems. Now add the current economic conditions, ouch! Hard to make a profit these days.If Columbia did not buy Montrail, would they be around much longer? Will they be? I believe La Sportiva was doing very well also? The cream rises to the top? And I heard your speedgoat team is sporting Sportiva's next year! As for cutting down race schedules, I am planning on cutting a race or two for next year, not only due to $, but because I feel that rather then talking about recycling this and that and wearing shoes and clothing that's easier on the environment, I would actually do, by cutting my gas consumption and buying less. Decreasing my carbon footprint through less consumption. In other words, sacrafice. Real sacrafice. And I don't feel it is necessary for me to fly or drive a long way to this big race or that name race. What for? I can just go to races that are close, with a smaller field of runners and a smaller entry fee.Have you looked around after some of these big "name" races and seen the overflowing garbage cans filed with plastic bottles, gel wrappers and paper. It's sickening. Am I off topic? Anyway, if there are less events held, I don't think that's such a bad thing.I'll just continue what I do every day, run the trails, in the mountains by myself with my music. I'll just race myself when I feel like it and just hang out in the peace and quiet. I'll be just fine!

  4. Michael Valliant

    If anything, a sport as simplistic as running, one that creates an outlet for stress, etc. may pick up. I'd think "trail running" as a sport would be fine.In the outdoor retail industry, brands and companies will have to differentiate themselves, to offer something above and beyond to keep and attract customers. When Montrail was bought up by Columbia, you could see the fall out by its core users, who blogged, wrote, talked about it, and how they felt quality went down and brand loyalty was no longer felt for the large corporate image. I would venture a guess that Inov-8 sales for the same period have been strong.It is certainly a time that we trim off the superfluous. But the brands and companies I care about, I still plan to support when I need something. Hopefully, that won't be TOO often :)I agree completely with Grae as well–trail running doesn't have to mean traveling to far away/name races. It can be hitting your own nearby trails with your friends. For me, it also means traveling with family and friends and making more a vacation/destination out of a race than just a run-and-go.Great topic, Goat. Look forward to hear what more folks have to say.

  5. Mike

    Great topic indeed Goat! I can provide perspective from multiple worlds – I work in the traditional CPG space AND I'm in the middle of launching Atayne – a start up performance apparel company. Here's what I see: within traditional CPG you're seeing two things – continued consolidation (CVS buying Longs Drug as an example) and a shift of dollars from more experiential, lifestyle type retailers to the value-oriented Mass Merchants (Walmart, Target) and Club operators (Sam's, Costco, BJ's). I'll bet Whole Foods will struggle (I believe they are discounting for the first time) as will other higher end food retailers (Harris Teeter types). Trader Joe's might be a good play right now as Whole Foods consumers might not want to give up purchasing organic / natural products but may opt for the lower price Trader Joe's. As a start up, Atayne is partly worried due to lack of liquidity in the market (re: investers) but we also see people willing to open there wallets and support a company with strong values and good products. As mentioned in earlier posts, I think people are thinking hard about non-essential purchases though – we see this at the race expos we're going to. I can't tell you how many times I've heard, "Do I really need this?" In the end we may benefit a bit more b/c we're so unique and people enjoy our story and want to support us. That said, I can definitely see the major brand label companies feeling the consumer spending pinch. On the other side of the coin, if people limit airplane travel to exotic locations, maybe more will head for the local woods and have to purchase gear to do so…Maybe more people will pick up running or camping – outdoor retailers sell bikes too, that's got to be hot right now (gas prices, green movement, poor economics). Lastly, what about the darn ski industry? They've got to be quaking in their boots right now!Sorry for the ramble – it's late.

  6. afuntanilla

    Very good topic! I feel that the repercusions from the current economic crisis will be seen in advertising and sponsorship. I heard that even Formula One and Nascar sponsors will be cutting back significantly. I think the shoe biz, not other "incendentals" will be able to weather the storm. As far as races go, yes, defintely will consider cost, especially since I just spent a lot on travel these past few months for races. But, if there is one I really want to do, I will work that in to my budget!

  7. Meredith

    Shoes you will always need to buy, but as far as running apparel, i rarely buy much. I have been wearing a lot of the same clothes for several years. It makes race pictures dull as i am always wearing the same thing, but it works for me. As far as the economy and ultras, i cannot take off so much work anymore and our future race schedule is going to be more localized. I love to travel to races, but the costs are skyrocketing. Last year my husband and i went to Rocky Raccoon for about $600 total for both of us. Now, we'd be lucky to get airfare for one of us that cheap depending on the day we book. :( luckily in the past couple years there has been an increase in East Coast races!

  8. saschasdad

    Well, we've definitely felt the economic downturn at Fleet Feet Bend. Put quite frankly: October sucks. We're trying to get around town and the region to get our name, and what we do, out. We're currently trying some new marketing strategies, one being free shipping to pretty much anywhere (or free local delivery). Obviously this doesn't allow us to take our customers through our FIT process, but if someone knows what they want, then we're trying to make it easy for them. We're hoping that people will continue to run because, as noted, running is a relatively inexpensive sport. $100 for a pair of shoes and you're good for 2-6 months. And Bend is definitely a very active town, so we're betting on that keeping us going, too. But it's just not going right now. Interestingly, Rod's Patagonia store is actually up this month compared to Oct. 2008, and we all know that Patagonia isn't synonymous with cheap.

  9. Buzz

    Thanks for your covering a wide range of topics intelligently!La Sportiva Running sales were up 30% over same quarter last year. As a family-owned company (no shareholders to impress), LS is less affected by the credit freeze.The economy should have very little effect on the sport itself, but there will be an effect on larger companies.Purely personal: I admit to being pleased by the economic collapse; I view it as a return to reality. The heroin needle is being withdrawn from the vein, and while painful, I think that's a good thing.What we truly care about – nature, friends, health – not only still remains, but may actually improve.

  10. bryan

    You'd think though there'd be the potential countercyclical upside for running too: it can serve as a cheaper replacement for fitness enthusiasts who turn to running in place of a gym membership, biking, or other more expensive mode of exercising.Maybe that will start to show up more in the spring when running outdoors versus at a gym becomes a much more attractive option.

  11. Trail Goat

    Sean,Thanks for the candid report on the retail side of things. It certainly doesn't bode well for the Q4 numbers.Buzz,Thanks for the kind words! I suspect La Sportiva is an outlier on the up side of things, as LS's sales have been up significantly in recent quarters. I can only hope that this economic downturn marks a critical inflection point in the reversal of suburban sprawl/preservation of wilderness. Furthermore, maybe Americas will remember that happiness doesn't come from a big screen TV, it comes from big dreams and big visions.Bryan,On the flipside, don't most Americans just look for an excuse to be lazy. No money for gym = no working out? On the plus side, more expensive food and a bad economy might be good news for the obesity epidemic!

  12. Travis

    Great topic indeed. I've been thinking about a lot of this stuff lately for all kinds of different types of businesses. From an outdoor perspective, I have stopped buying all together on the apparel end. The only thing that I buy right now that has anything to do with running is energy chews and gels. It's not that I could not use a new shirt, shorts or want to check out a new shoe design, I just can't do that now due to the economy.From the montrail end, I think Michael V hit it. I know personally that I choose not to wear them just because of what they did to the ultrarunning team and the perceived reduction in quality. In the end, I like supporting a company that seems to believe in the product, development, and users of its' products. So when I step back and see an investment from companies like Inov-8 and LaSportiva in products and community I am more likely to buy from them when a buying decision needs to be made. Why would I "invest" in a company that does not seem to invest in itself? It’s not any different than the stock market. It just happens at the personal level.More than anything I just think that with the economic climate as it is that people spend a little more time thinking about what they are going to purchase. Less snap decesions are made so the brand needs to be (or appear to be) solid. The better the perception of that company/brand, the easier time they should have when consumer buying is low.

  13. Jan Myburgh

    Hmmm, this is a very interesting discussion.Well, in South Africa trail running is actually picking up because of the economic conditions. A lot of adventure racers are turning to trail running as a cheaper form of racing. I think it is partly due to our rising fuel costs. Trail running is probably one of the cheapest forms of outdoor sports available. Sports like mountain biking is feeling the pressure a lot more…

  14. Trail Goat

    Jan,That's an interesting angle. Personally, I don't know very many adventure racers – maybe only two among all my trail runner friends. It would be interesting to see if adventure racers were making similar changes State-side.I agree that trail running can be pretty darn cheap.

  15. Anonymous

    Montrail will rebound, mark my word. Might not be in 2009, but but in a few years, they will have things turned around. Allow their transition into Mountain Hardwear to set in, and that marketing team will take Montrail to new heights

  16. Trail Goat

    I think there are MUCH better synergies (and energy) with the Mountain Hardware/Montrail combo than there was up in Portland. I'm looking forward to seeing who MH/Montrail pull out of the hat for the team manager position… hopefully, a long time insider that knows the sport inside and out. The trail and ultra crowd can be a fickle lot and, sadly, will have to be won back at this point.However, with the Steak and soon the Mountain Masochist, Montrail will have two "new" great all-around shoes in it's lineup that a properly funded marketing team can ride to the top of the mountain. Of course, there's the Hardrock as well, but it's a known quantity in the sport. Hopefully, the Hardrock '09 is as solid as its predecessors.

  17. Don

    I had the chance to meet the new Montrail team manager at Masochist a few weeks back. He's a runner, but not an ultra runner. Sounds like he's got several other duties than just team manager, including helping out on the Mtn Hardwear side. Nice guy, no past relation to the running world, so he comes in with a clean slate and open mind, but he does have experience in the outdoor industry. And he seems serious about turning things around for Montrail on the grassroots level. On another note, any rumors about trail runner of the year awards this year? runner of the year?

  18. Trail Goat

    Don,I have to admit that I'm a bit disappointed that an trail runner didn't get the job, though I am encouraged that the new guy "seems serious about turning things around for Montrail on the grassroots level." The problem as I see it is that I'm not sure an outsider an understand how to turn things around at the grass roots level. The community can see well intentioned ideas as slights and I think it is differently motivated than many other sports. Pure advertising isn't going to work and even that the grassroots level putting a logo on race numbers or banners up finish lines isn't going to build a brand. I've worn many Montrail shoes through the years (and lest folks think I'm biased, still use the Hardrock, Streak, and Mountain Masochist). How did I learn of Montrail and learn of its products? Word of mouth on the trail.

  19. Don

    I think you've misunderstood. The guy is a trail runner, just not an ultra runner. And word of mouth is a form of grassroots marketing, not one you can pay for, but it happens via strong grassroots efforts. I think the other thing with Montrail is that product development and design needs a kick in the butt, not necessarily marketing and advertising. It will be interesting to follow their progress over the next few years, but I'd imagine they'll turn things around.thanks goat

  20. sdrunner

    Very interesting topic. I think it's a tough time now for everybody, not just trail runners. Very interesting data nonetheless.

  21. Speedgoat Karl

    You can expect Montrail to become "Columbia Grade". They got rid of their core athletes they started with. Jurek, Meltzer, Koerner, Torrence just to name a few. Had they kept them from the beginning, the grassroots "word of mouth" marketing would have kept Montrail on top, now they are losing business because they continue to change things every year, from shoe design to athletes. They have no clue, and it's a shame. Cheers to Menno Van Wyk (previous owner of Montrail) for selling at the right time. I bet he's in Thailand climbing, and loving it!

  22. Bryon Powell

    Karl,Montrail undoubtedly let the best grassroots campaign in the ultrarunning world slip away. Right now it's a crap shoot as to who will take over the spot. It's a bigger prize than folks realize.

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