AT THE AFTMA SHOW IN ANAHEIM NEXT MONTH, VENDORS WILL HAVE TO WORK OVERTIME TO GET BUYERS EXCITED ABOUT THEIR NEW PRODUCTS AND MARKETING PLANS.
DESPITE SOME OPTIMISM THAT THINGS WILL BE BETTER FOR THE FISHING TACKEL INDUSTRY IN 1992, BUYERS ATTENDING HE AMERICAN FISHING TACKLE MANUFACTURERS ASSOCIATION SHOW WILL SPEND CONSERVATIVELY.
The overall tone of the 1991 – 1992 fishing tackle market heading into the AFTMA Show is encouraging. But distributor and retailer buying is more likely to be conservative. Lack of consumer buying-confidence, prompted by the continuing recession, has made distributors and retailers cautious. Continued consolidation at all levels of the industry isn’t calming their nerves, either.
Western-Hoegee and Faber Bros., Inc. are typical of many distributors taking a conservative approach. “The nature of our business today and the conditions that exist in the economy will require us to be more efficient in all of our practices and deployment of resources,” said Nick Elowitt, executive vice president of southern California-based Western-Hoegee distributors. “We just have to be more efficient in all ways, shapes and forms. And that means tightening up the old belt.
“I would tend (this coming year) toward the tried-and-true oldie products, the standards, the ones you can count on,” said Elowitt. “We’re not afraid to stock up merchandise as long as we have fairly good certainty that we’re going to move it. But for something that is untested, they (manufacturers) can be the warehouse.”
Elowitt said manufacturers are getting their samples in early this year “because they want to get orders before they make anything.”
However, he maintained, “They’re not going to get orders out of me in June and July, I can promise you! We don’t know what we’re going to carry. What we carry is predicted on what our customers want, as well,” he said.
Faber Bros.’ president Art Shapiro is equally cautious. When asked how he saw wholesalers spending their open-to-buys, his reply was simply: “Very carefully!
“We certainly aren’t going to overbuy,” said Shapiro. “I think there’s going to be plenty of goods. We don’t foresee any shortages. We’re waiting to see if there are going to be any blow-outs. That will be part of our game plan when we see what’s available…what’s being blown out, if anything.” Shapiro indicated he thought everybody would looking for bargains.
“The sales people tell us that the stores are in good shape, inventory-wise. But they’re not re-buying. They’re letting everything (inventories) run down. I don’t think they’re going to change their buying habits until consumer-confidence comes back,” Shapiro noted.
“The recession caused consumers to lose their buying confidence. For people out of a job, that’s a depression. For those still working, yet not getting pay increases, it’s recession. They are saving their big bucks for their kids and education and the lottery,” he explained.
“In opening orders,” said Shapiro, “we’re likely to be buying less than last year. In the long run, it will depend on how heavy we re-order. Our buying patterns have changed substantially in the last two years. The main change is buying smaller quantities more often, just in time for delivery. Five years ago, we built up a nice inventory and would go on a four to five week turn. Now, we’re looking at 10 days to 14 days at the max.
“We’re going to cut down skus somewhere between 15 and 20 percent. This, in turn, will take some of the peripheral vendors out of there,” he said.
“Consolidation is still the word. And I think we will see more closures than we have in the past until this shakes out. If the confidence has come back, we’ll have a good Christmas season. That, in itself, will tell us whether we’re buying wrong or are on the right track,” Shapiro said.
Certain manufacturers are tending towards greater optimism. Others see continuing signs of consolidation and expect wholesalers to continue to play it close to the vest. They expect distributors to watch their inventories carefully, but to be looking at new produces to generate interest early in the year.
“They’ll be looking for the brands that turn,” said Zebco director of marketing Denny Jackson, “to do business with the people that are advertising their product and creating a sell-through environment and demand for the product.” He also noted that although the mass merchant has continued to upgrade product product listings, the independent dealer still represents about 30 percent of all units sales, perhaps more in dollars.
Terry Flynn, executive vice president of sales and marketing of the tackle division at Daiwa, believes that manufacturers are going to have to carry the burden of the inventory in the future. “They want the manufacturer to carry the inventory for them. They want to buy it, basically, after they’ve sold it,” he said. “The distributors are buying what they think they’re going to sell. They’re not just reducing skus any more. They’re reducing vendors.”
“We’re guilty of almost killing ourselves with too many skus,” said Toby Bridges, public relations director for Bass Pro Shops. “When it gets down to it we have a lot in the showroom we don’t have in catalogs. Our overall skus are probably more than 75,000. We’re looking for a considerable overall inventory reduction, having taken it down a couple of million dollars without really trying.”
If, indeed, the strategy for distribution in 1992 continues to be consolidation, some manufacturers, distributors and retailers may find the going the tough. Nonetheless, some industry observers believe there will always be room in the market for manufacturers who produce products that sell. As Toyo Shimano, fishing product marketing section manager at Shimano, said “I would think that a lot of the distributors are going to cut back on skus and stick with the ones that really work. But I don’t think they will automatically refuse to stock anything new just because it’s new and doesn’t have a history. When times are tough, distributors are always willing to jump on something new.”
RECOGNIZING THE PROBLEM
AFTER YEARS OF ANALYSIS, FISHING TACKLE MANUFACTURERS THINK THEY MAY HAVE DISCOVERED SOME OF THE REAL CAUSES OF THE MARKET’S FLAT GROWTH. IT COULD BE THEM.
Mixed feelings of optimism, tempered with concerns for the resources and a declining consumer base, were voiced by industry movers and shakers prior to the 1991 AFTMA Show. But what is encouraging, said manufacturers, is that they are beginning to understand some of the real causes of the flatness.
Few SGB sources expect to see dynamic economic turn-around like that predicted for the period following the end of Operation Desert Storm. To the contrary, most see the tackle market’s recovery linked to the rate of the nation’s recovery from the present recession. In addition, vendors also acknowledge that the industry has to take measures to heat up the market, too.
“I think the market is as good as the individual store makes it,” said South Bend president Kel Kostner.
“Obviously, the country is in a recessionary period. The psychological effect of that affects a lot of industries. But the tackle industry isn’t as bad as some would make it out,” said Kostner. “In fact, we’re having a pretty darned good year at South Bend. And I think that the aggressive merchant out there is doing reasonably well.”
Kostner noted another reason for optimism: slow deliveries from some manufacturers. These may indicate inventories are not at levels that might cause closeouts, he said.
Al Russo, group manager of Du Pont Fishing Products, was more guarded. “I’m ahead of last year, but behind where I think I should be. I’m conservatively optimistic, but that could change. We’re seeing a great deal of movement at retail with larger accounts. Smaller accounts are coming along approximately three weeks behind them. A lot of people are playing it closer to the vest and being much more conservative.”
Terry Flynn, executive vice president of sales and marketing of the tackle division at Daiwa, noted the market is down and thinks it’s going to stay that way for the next few years.
“Our business is good,” said Flynn, “but it’s a dog fight. I would suspect that we’re probably in the minority.”
Berkley president Tom Bedell sees a need to keep pace with the change that’s rocked the tackle market in recent years.
“We’re in a revolutionary change period. We need to be a part of that change or be swallowed up by it,” he said. The company’s new slogan is “Dedicated to the Future of Fishing.”
“We are expressing that in three very aggressive ways: a broad commitment to the environment, an aggressive program of trying to increase fishing participation, and our commitment to deliver products that performance- and technology – wise, in fact, will help you catch more fish,” Bedell said.
Howard West, project manager at Scientific Anglers/3M, a company that has long made effective efforts aimed at attracting new participants to fishing, pointed a concerned finger at some major causes of this change.
“In general,” said West, “I think the industry is paying the price for the lack of investment in educating new legions of participants. Because of that, there are fewer people coming into the sport. And attrition, I think, is really eating into general tackle sales.”
To protect the fly fishing market from suffering the same fate as the general tackle industry, which was a result of production outstripping world need, West said the industry should act soon.
“Our response at Scientific Angler/3M has been the Mastery program, which pushes education, education and more education,” he said. He recommended that every manufacturer find a way to increase the level of educational activity in order to bring more people into the sport. “If we can’t there are too many fly lines, too many reels, and to many rods, waders and flies,” West said.
Fenwick’s general manager, Phil Dyskow, commented that the ability to respond is a key element in compensating for the current fits and starts in the economy.
“If you have a narrow of opportunity to sell your product, you’ve got to be able to perform; to be able to ship it; that’s what we’re trying to accomplish at Fenwick. We were successful in 1990-1990, because we got product out to the market early and we had some new products that generated a lot of interest at wholesale and retail levels.
“For the fiscal year to date, we’re running approximately 17 percent ahead of last year. There are two reasons for that. First, we got our products produced ahead of time. We got a lot of it shipped in all of 1990, prior to the war disrupting business.
“Because Fenwick introduced a lot of new product and shipped it on time, or even early, we were not impacted perhaps as heavily as some others were. The other part of it was that we introduced some new rod series that had phenomenal sellin, probably the most impressive of any in our history.
“This year,” continued Dyskow, “our warehouse already is filling with 1992 goods. We’ll be able to deliver them into the market when it needs it.”
Zebco views the market somewhat more conservatively, but it is not negative about prospects for 1991 despite seeing the market as still being pretty flat. SGB’s source there said the firm feels the market is turning in the right direction.