Rec Equipment Companies Find Stronger Demand
9/7/2010
Buck Knives manufactures more than three-quarters of its outdoor sport knives and other cutlery in Post Falls.
When Buck Knives moved from California nearly 5 1/2 years ago, the company took advantage of Idaho’s lower business costs and some incentives to build a highly specialized factory, where lean manufacturing processes have been in place from the outset, National Sales and Marketing Manager Bob George said.
Under those conditions, Buck controls quality, tracks costs, responds to demand and avoids tariffs, fees and potential delays on overseas shipments.
“People are looking for bargains, and on what they are buying, they are moving their price point down,” George said.
Many customers will spend about two-thirds as much as they did four to five years ago, for quality cutlery, he said. What was once a $129 sale, has turned into a $79 sale.
While recreation enthusiasts continue to spend, the state’s recreation economy continues strong.
“People continue to be cautious as far as making purchases and the amount they’re spending,” George said. “They’re still buying our products. They’re just looking for easier price points.”
Idaho Commerce Department is working with its “recreation technology” companies that manufacture or sell outdoor products, said Tom Liby, business attraction specialist. More than a hundred companies operate in Idaho. Of those companies, they are projecting a 12 percent industry growth rate as compared to a 2 percent nationally, Liby said.
A company that recently expanded in this area is Aire Inc., an inflatable boat manufacturer in Meridian.
Aire Inc. Vice President Dan Allumbaugh said business was picking up so well that they entered full-time into manufacturing in 2009. Lower-end unit sales started to increase last year and have continued to build momentum this year. Company officials are expecting to see increases in the middle and high-end segments.
Rafters seemed to make-do with what they had in 2009 and only returned to Aire Inc. for warranty-covered repairs, he said. But, this spring, the company has seen replacement sales rise.
Idaho River Sports operates a showroom in the Aire manufacturing facility in Meridian, Leon Doar, store sales manager, said there has been an increase in sales of higher-priced items this year.
The outdoor recreation industry in Idaho generates about $154 million in annual state tax revenue, produces about $2.2 billion a year in retail sales and services - about 5 percent of the Gross State Product - and supports about 37,000 jobs, he said.
Boise-based Lucky Bums had doubled its revenue and backlog from a year earlier as of late July, said Mark Coffman, president. He said doubling business was easier because of the company’s size. Coffman said they were able to attracted growth capital to meet increase demand fairly easy.
“We have larger, chain, customers, but a lot of our growth is through our independent retailers,” he said.
Demand from retailers increases as parents get their children outdoors and spend money on their children for outdoor recreation equipment. It’s cyclical, he said.
“From small guys to big guys [outdoor products companies], they had significant increases from the previous year’s Q1, and that probably rolled into Q2,” said Coffman, who attended a outdoor retailers convention in July in Salt Lake City. “People are looking up, getting outside, and spending.”
Concerns are easing among outdoor industry executives, according to Piper Jaffray Outdoor Industry Survey results reported by the Outdoor Industry Association. In the February survey, 37 percent said they are “very concerned,” down 18 percentage points from the previous fall. Forty-five percent reported revenue increases in the prior three months as of the early 2010 survey compared to 29 percent in the previous fall. Seventy-one percent of participants in the February survey expected higher revenue in the next three months comapred to 35 percent in the fall survey
News tag(s): AIRE Buck_Knives Outdoor_Industry Idaho_River_Sports Project_60