Outdoor Suppliers Defy German Retail Crisis

A few decades ago, camping was a basic activity -- a stretch of canvas hung over a cord, a sleeping bag, a fire and a fishing rod were the makings of a relaxing weekend in nature.

These days, there is a mind boggling array of outdoor sports and leisure activities on offer to average folks: mountainbiking, canyoning, rock climbing, Nordic Walking, hiking, windsurfing, kayaking, canoeing, sailing -- the list just keeps getting longer. And the market share of outdoor products (a subset of the sporting goods industry,) keeps growing right along with it.

Stable sales

Outdoor products have become responsible for 31 percent of the overall sporting goods market, up from 27 percent in 2001. And while most German retail sectors saw decreased sales over the past year, revenues in the outdoor sector remained relatively stable, totaling 1.5 billion euros ($1.94 billion) in 2004.

"Our industry has seen a relatively stable level of sales -- somewhere between negative 0.3 percent to zero percent sales growth," said Andreas Bartmann, CEO of Globetrotter, Germany's largest sporting goods and outdoor-equipment retailer. "But other industries have had it much worse. The textile industry was down a full 2 percent last year."

In general, Germans are an outdoorsy lot. On Ascension Day this Thursday, a national holiday in Germany, millions will head outside. The Sunday afternoon hike is a time-honored family tradition, and sports clubs are a widely used social outlet. This is reflected in the overall sales of sporting goods, said Helmut Ott, who heads up the Alliance of German Sporting Goods Dealers. Despite overwhelming economic woes, the sector is surviving.

"Of all those doing poorly, we're doing best," Ott said with a laugh. Sales in the "basics" -- soccer shoes and shirts for example -- are still selling, he said. "But for the time being, outdoors equipment brings in the most money."

He noted that the industry is feeling a lot of pressure from massive discount chains like Aldi, Lidl and Tchibo. These companies sell low-cost food or coffee, but in addition they bring out a limited number of nonfood items each week. The shopper who stays on top of the changing product lines can buy in-line skates, hiking boots, an all-weather jacket, pocket knife, tent or riding jodhpurs for a fraction of what they would cost in a sporting goods shop.

The pressure has meant that some smaller stores have been squeezed out of the sector altogether. The secret of survival? Don't try to compete with discounters by lowering prices and slashing staff, said Globetrotter's Bartmann.

"The stores that succeed have a different concept," he said. "They've made going into the store an emotional experience, one that gives you the feeling of the outdoors."

A case in point is Globetrotter's Hamburg store, which has an outdoor-adventure ambiance and features a built-in climbing wall (above), a multi-surface walking course for testing hiking boots, and a plant-filled cafe.

The've gone so far as to pulled in Mongolian musicians to promote trekking in Asia, and had animal handlers on hand to show off the snakes and spiders one might run into in the forests of Central America.

The company, which employs 600 people in Germany, has seen sales rise 18 percent over the past four years, to around 100 million euros at the end of February.

At the Cologne branch of the retail chain Outdoor, which opened in 2004, manager Maurice Goddar said sales have been booming. He attributed the success to the fact that the store offers expert customer advice as well as replacement parts.

"At some point people want quality," Goddar said. "And then they come to us."

"Nordic Walking is huge"

At his store, "tents are big sellers even though we are in the middle of the city," he said. "Don't ask me why. People in their 20s buy a lot of climbing equipment. And the whole Nordic Walking thing has been huge."

But Peter Aderhold, chief of the Travel and Holiday Research Group, cautioned that it is wrong to assume Germans are taking more active vacations just because outdoor retailers' cash registers are ringing.

In fact, "with daily stress levels increasing due to the uncertain job market, and the fact that people are working so much ... the trend in the German travel market is toward lower activity vacations -- sitting on the beach eating ice cream rather than doing some exotic trek," he said.

So what explains the growth of the market sector?

Please continue reading to find out what the experts have to say.

The future is gray

First of all, new strains of clients visiting the stores: pensioners and families.

Travel researcher Aderhold explained said that in the past, a German retiree's vacation consisted of sitting in his backyard. Today, "a 65 year old will do things that they wouldn't have done years ago," he said. "A hiking tour in South America or something, they're doing activities that we used to associate with 30- or 40-year-olds."

And retirees who take such trips tend to be at an age where they can afford high quality clothing and equipment.

"They want the best textiles, nice bags, good shoes," Globetrotter's Bartmann said. "And they want sales assistance."

Another booming sector is families, Bartmann said. Even if most people do chose relaxation trips, many are opting for "adventurous" activities like canoe trips and camping.

The sector has increased noticeably over the past five years, Bartmann noted. "You come into our store on a Friday night and it is just full of families with children. In the end it may still be a small segment of the market, but previously it didn't exist at all. So it is very important for our sales."

Trying to make the most out of this development, outdoor companies increasingly aim their marketing campaigns at families. One example is the cooperation Jack Wolfskin, Germany's largest outdoor goods manufacturer, started with Mercedes Benz in 2004 to offer an outdoor-sports competition for families. And retailers such as Globetrotter and the Cologne-based Blackfoot regularly offer classes and seminars aimed at families.

Nostalgic trend

Also, the renewed interest in the Great Outdoors may be part of a general nostalgic trend sweeping through Germany, according to travel researcher Aderhold.

"Younger people aren't rejecting the home market anymore," he said. "The Alps, in Germany as well as Austria and Switzerland, are back in fashion to some extent."

Finally -- and possibly most importantly -- the retailers note that what once counted as a specialist product now has a much larger use in the marketplace. Businessmen carry backpacks, kids wear Gore-tex hiking boots to school, and housewives put on their ultra-light, breathable, all-weather jacket to go to the market.

"It used to be these things were just for the hardcore outdoorsman," Bartmann said. "That's just not the case anymore."