Boomtown Sports Inc.: Cutting Edge

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After 11 years in the ski retail business, Dale Arsenault knew if he wanted to be on the cutting edge and sell any Boomtown Sports Inc. skis made at the company’s Kootenay plant, he had to be at demo days.

Demo days at ski hills are do or die for ski manufacturers. In a single day, athletes will try more styles of skis than they can remember and, just maybe, the one pair they can’t forget. That’s the hope of the ski reps who roar up to the hill in their shiny SUVs plastered with company stickers. After sliding into the reserved parking spots at the front of the snowy lot, they unload their 10 or 15 pairs of skis into the snow, set up a booth and get to work. After 11 years in the ski retail business, Dale Arsenault knew if he wanted to sell any Boomtown Sports Inc. skis made at the company’s Kootenay plant, he had to be at demo days. So last winter up he went to Red Mountain Resort near Rossland, to let powder junkies compare his three models against the big boys: Salomon, Atomic, Rossignol and K2. He parked his vehicle beside the other reps and headed up the mountain. Things went pretty well that day – his skis garnered rave reviews. When the lifts stopped turning Arsenault headed to the car with a smile on his face, but his good mood was short-lived. He’d been towed. “No one came to ask me to move it,” he says. “All that mattered was that it didn’t say Salomon on the side.” Such is life when you’re the little guy competing among giants. The Clearly Canadian battling Coke and Pepsi. The Lululemon duking it out with Nike and Roots. In the world of ski makers, Arsenault is downright tiny. He pressed 200 pairs of skis two years ago and is still selling them for $445 a pair, while a giant like Slovenia-based Elan Skis presses 400,000 pairs a year, retailing for up to $1,000 each. In an industry ruled by Goliaths, Arsenault is part of a growing number of small ski manufacturers who survive by carving out a niche. Many of these companies are founded by passionate skiers who are dissatisfied with what the big players produce and are convinced they can do better. B.C.’s vibrant ski culture and terrain have produced four such ski companies in as many years, and for a few the challenge is staying small amid growing demand for their skis. Arsenault’s is the second-smallest of these companies, which are all privately owned (and therefore did not give BCBusiness much in the way of sales figures or financial information). None comes close to the might of industry leaders, but none wants to. Genuine Guide Gear (better known as G3), Prior Skis, Capital Custom Skis and Boomtown are all trying to avoid wipeouts in a race with pros by doing things differently. “It ain’t easy to be a small ski manufacturer,” observes Bob Orbacz, the director of finance and operations for SnowSports Industries America in McLean, Virginia, which represents ski and snowboard companies in North America (he’s also the former president of U.S. operations for Elan Skis). He says a few big manufacturers – K2, Rossignol, Elan and Salomon – currently sell 75 per cent of the skis on the market. About five or six medium-sized manufacturers sell about 20 per cent, leaving 30-odd smaller companies to fight over the remaining less than five per cent. New companies struggle to find retail reps, convince shops to carry their brand, win over skeptical skiers and get their products reviewed in the top ski magazines. But as Orbacz points out, making money in a retail environment is really the hardest challenge. “The price of most ski packages hasn’t changed in 15 years,” he says. “What does that tell you? Retail stores aren’t letting their margins slide.” Ski store chains, especially in the U.S., are asking for better discounts on large orders, pressing manufacturers to pay for shipping and looking for more marketing and advertising support every year. “They’re beating the hell out of their suppliers,” Orbacz says. That’s why all the B.C. ski makers avoid the retail market – except one, G3, a backcountry snow-gear manufacturer based in North Vancouver. Unperturbed (or maybe naively), G3 owner Oliver Steffen decided to sell his ski line using G3’s already established network of retail locations – 800 stores worldwide, 400 in North America – but on his own terms. “We don’t deal on our products,” says Steffen. “Whether you buy one unit or 1,000, you pay the same price. That’s very different in the ski industry.” Everything about G3’s ski line goes against the industry norm, but it seems to be working; in its first year of production G3 tripled its sales target, says Steffen. Unlike most ski manufacturers, who collect orders from retail shops in January and then get their skis made, mostly in European and Asian factories, for delivery in September and October, Steffen forked over the cash and pressed what he considered a decent first season’s worth of skis in a Tunisian ski factory. The North African facility is owned by a Swiss ski maker who picked the location for the level of dedication of workers. Steffen spent a week at the factory in 2003 talking to employees. “You don’t need to know skis,” he says. “You need to care about quality and care about what comes out of the factory. They do a good job because they value their job. Jobs are hard to find over there.” The Tunisian factory produced four ski models for G3, mostly designed for no-lifts, human-powered backcountry skiing, and shipped them to the company’s Montreal warehouse before any retailer knew the company was even making skis. In October 2003, after retailers had already received their inventory for the season, G3 sent out an email to its network of distributors announcing the launch. “The shops had every reason not to buy any skis,” Steffen says. “We kept our expectations low. There was never any sales pressure.” Stores didn’t need any. “It was hard on our budget,” remembers Jerry Mundi, the owner of Courtenay’s Valhalla Pure Outfitters, an independently owned chain of B.C. outdoor retailers that landed 20 pairs of the 2,000-pair first shipment. “It was a big step, but I didn’t hesitate. I was happy to get them.” Within four days of the news of the launch, the first order was sold out. A second factory run sold in four weeks, and a third carried G3 through the first winter. Sales kept ticking along even though the skis, at about $700 retail, are around $100 more than other backcountry skis. G3 is now B.C.’s biggest ski manufacturer and doesn’t consider itself a small fry anymore. “We’ve sold way more than we ever imagined,” Steffen says. “We don’t know where all the skis are going.” It didn’t hurt that G3 already had a successful line of backcountry ski accessories such as shovels, telemark ski bindings and avalanche probes. Its established retail network eased G3’s entry into the ski business. “People don’t worry if our product works or not because they know that we are skiers and we produce good stuff,” Steffen says. Skis, G3’s first big-ticket item, gave retailers and customers a sign that G3 had matured which, in turn, boosted sales of its existing accessory items. Over the 10-year life of the company, sales revenue jumped from $50,000 in 1996 to $6 million last year. Mundi says the same is true for Prior Skis, where anyone can visit the factory and watch skis get pressed. Since 1990, Prior Snowboards, a Whistler-based snowboard manufacturer with 35 World Cup snowboard race wins and a loyal following for its backcountry snowboards, has gained a solid footing. When Prior started pressing skis in its Whistler factory in 2004, some of the first customers were Prior snowboard owners who also skied, says Dean Thompson, the company’s GM. Prior started with one ski design but has since pumped up its line to three, available to order with six choices in how the base of the ski will look, seven choices for graphics on the top and three choices in fibreglass weight. Unlike G3, Prior’s initial business plan was to sell only on its website. “We couldn’t afford to build virtually custom skis and sell them at a price retailers could buy them at, and still make money,” Thompson says. “Going into retail happened by pressure from vendors.” By 2005, snowboard shops and specialty ski shops were hounding Prior for skis, despite the $899 price tag. Comparable skis from Rossignol would come with a binding for about the same price, a savings of at least $200. It’s a tough sell for retailers who have to eat markup and still convince customers to pay extra for quality. “They don’t give any leeway in pricing,” says retailer Mundi. “We’re not going to make a lot of money on them, but they’re a quality product and that’s what’s important.” [pagebreak] This winter, 12 stores – four in Canada, four in the U.S. and one in Spain – will carry Prior skis. A lot of sales are still made over the Internet to Europe and the U.S. Thompson won’t divulge financials, except to say that sales are going well. “Our game plan is to stay small and listen to our customers,” he says. (He points to the Doughboy, a big-mountain powder ski the company developed when customers asked for something bigger than the original model.) He is hesitant to add too many retailers to Prior’s supply line because the factory is maxed out filling the orders it has already received. Staying small has other advantages, such as an ability to change ski designs almost up to delivery day. “We’re more adaptable than a Rossignol,” he says. “They’ve finished their winter 2008 lineup already. We’ll be fine-tuning ours up until summer 2008.” Twenty-nine-year old Greg Funk, sole proprietor and only full-time employee of Capital Custom Skis, also sees the value in staying small, but for different reasons. If business gets brisk, it will cut into his skiing. Part-time carpenter, part-time competitive extreme skier and full-time ski bum, Funk got into making skis by fashioning his own. His wooden skis (he sandwiches maple and aspen or maple and ash into a ski that looks like a nice hardwood floor) were as eye-catching as his skiing, and he was soon fielding orders. “It’s something that’s just turned into a business for me,” he says. He now makes handmade, custom-ordered wooden skis for clients, mostly in Europe and the U.S. They can choose from one of Funk’s tried and tested designs or come up with their own. If they opt for the latter, a pair of skis will emerge from Funk’s Pemberton garage within 14 hours. “That’s a lot longer than most ski manufacturers,” admits Funk. “I think Salomon makes a ski every 15 minutes.” Being one of the few custom ski makers, and competing in extreme skiing competitions, has helped sales – perhaps a bit too much, according to Funk. He was so busy making skis it cut into his ski season, so this year he wanted to finish production before the lifts started turning at Whistler. He capped the number of orders he accepted and sold out before the end of summer. He doesn’t want to hire more than one part-time staffer and plans to keep things simple. “I’m not much of a businessman, obviously,” he says with a laugh. “It’s not what it’s about at this stage. I have low overhead and I don’t need to produce a lot to sustain the business. When I want it to grow, it won’t be a problem.” Over in the Kootenays, Dale Arsenault isn’t relying on his skis to get rich, either. Four years ago he was having trouble finding fat, powder-specific skis at the price he wanted for his chain of three Boomtown Sports Inc. stores. (He now has only one, in Nelson.) “So I said screw it and decided to make my own,” he says. He searched out a Shanghai factory to press them and then designed his first pair. He knew what he wanted – a ski that made powder skiing easier and was affordable. The Kootenay Powderstick lived up to his goal and Arsenault followed it with two other ski designs the next two winters, all selling for a cheap $399 to $450. Still, Boomtown skis aren’t exactly flying off the shelves; the company sells about 30 pairs a year. Arsenault spends next to nothing on marketing, focusing on price and the made-in-the-Kootenays branding. People associate the Nelson area with powder skiing; therefore a ski designed there must be good in that kind of snow. There’s a souvenir-like value, too. “Part of the attraction was that you could only get them in the Kootenays,” Arsenault explains. At demo days on Red Mountain, Arsenault’s Powdersticks, in particular, earned positive reviews. He tailored these skis for the B.C. Interior’s famous powder and steep tree skiing. They have a soft, fat tip and a narrower tail to make fast turns easier. Then he added head- turning, flaming graphics and a cheap sticker price. One of Powdersticks’ biggest fans is Dan “The Ski Man” Maricich, who bought 15 pairs for his backcountry ski touring company, Morningstar Ski Tours. Originally, Arsenault’s skis were sold only in the Boomtown store or through the website, but then retailers began asking for them. Mountain Equipment Co-op and two other stores in Kimberley and Cranbrook are carrying Boomtown skis this winter. RK Heliski, based in Invermere, also bought 15 pairs. The models produced by B.C. ski makers all fit in a segment of the market known as park and pipe (read: aerial tricks) and big-mountain powder skiing. Sales in this segment are growing fast and are ruled by smaller manufacturers. That’s making the big boys nervous. Robin Scrimger, marketing manager for Biglines.com, a website devoted to this new ski niche, says a rep from Rossignol told him competition is tough, even for a giant. “He said they are tweaking their marketing to try and compete with the small brands,” Scrimger says. “People like to support the little guys.” It’s part of the ski culture. Like skateboarding and snowboarding, being original and different is cool in big-mountain and park-and-pipe skiing. Little brands, with funky graphics and customizable options, have huge appeal. New developments in ski design are also making skiing easier, and that’s another trend B.C. manufacturers are playing to. Snowboarders are switching to skiing, a reverse of a trend seen in the 1990s, as skiers on bigger, easier-to-turn skis push the sport to new extremes. “Snowboarders see what skiers are doing,” says Jack Minard, a sales- person at Ski Tak Hut, a ski and snowboard shop in the Comox Valley. “When those snowboard converts get into skiing they want the bigger, twin-tip skis,” like the ones produced by the B.C. manufacturers. If these B.C. companies sound like they’re taking the laid-back West Coast attitude a little too far and lack the aggressive edge needed to survive in competitive industries today, there could be an explanation. Remember the painful bust that followed the initial snowboarding boom? Well, scars remain. By the mid-90s, phenomenal growth in snowboarding produced hundreds of small snowboard manufacturers. Demand slowed as interest peaked and the industry went through massive consolidation. There are now about 50 snowboard brands. A repeat isn’t likely for skiing; the industry is more mature. Still, the niche ski market can only expand so far. That’s why all four B.C. manufacturers say they’ll continue to focus on what they do well: G3 strives for innovation, adding backcountry-friendly asymmetric edges (designing inside and outside edges of different lengths for smoother turning), and working with top sheet materials that shed snow; Prior is making almost-custom big-mountain skis; Boomtown is focused on affordable, cool-looking performance skis; Capital Custom is taking the hand-made route. One industry insider says they’re on the right track. “I have a feeling they will all do okay if they stick to what they are good at,” says Martin Olson, Ski Canada magazine’s technical editor. The fact B.C. ski makers all produce powder-skiing-specific, and terrain-park-and- half-pipe-specific skis – two overlapping, fast-growing segments of the ski market – bodes well. Even though these ski styles only make up about 10 per cent of the overall market, Olson says sales in this niche increased 600 per cent in the last few years. “They’re in the right place at the right time,” he adds. “If they try and compete with the big boys they will get eaten alive. But, I’m an optimist. I think there is room for the little guy.”