How sports brands try to save their dealers

Munich Amazon? No thanks! Christian Schneidermeier has been concentrating on specialist shops for years. The boss of the popular mountain sports specialist Ortovox consistently refuses to shop online. His highly functional clothing and avalanche transceiver are only available from specialists who offer proper advice.

Now the manager fears that many of the shopkeepers will have to give up because of the corona crisis. It would be a disaster if his distribution network collapsed overnight. Schneider Meier is therefore breaking new ground. He provides merchants with online vouchers that they can pass on to their customers. This is supposed to help people shop in the Ortovox internet store.

A quarter of the revenue then flows to the business owners. “We want to maintain the diversity of the small specialist retailers. That has always been our basis and should remain so, ”explains Schneidermeier.

Like Ortovox, many sports brands are trying to support retailers these days. With good reason: Thousands of shopkeepers fear for their existence because they hardly sell online, but their shops remain closed indefinitely.

The outdoor chain McTrek had to file for bankruptcy on Thursday. The branch operates 43 stores and employs 420 people. The sports brands are therefore afraid of future companies like Amazon or Zalando to be instructed.

Round table planned

The Sport 2000 dealer association is therefore trying these days to get shopkeepers and brands at one table. Managing director Markus Hupach emphasizes that it is about concluding a solidarity pact.

There is a lot to discuss: for example, the question of how the masses of items currently stacked in the warehouse can be dealt with with the lowest possible discounts.

There should also be talk about when new products will be launched. Because with every novelty, the shirts, shorts and shoes that are not yet sold are worth less. Sport 2000 invited leading running providers to the first conversation, among others Asics, Brooks, New Balance, On and Saucony.

Benedikt Böhm was one of the first in the industry to respond. The head of the Alpine equipment supplier Dynafit announced in March that the 2020 summer collection would also be available next year. He wants to prevent a price battle in the next few months. “This is a clear sign to the stores that our goods are not getting old,” emphasizes Böhm.

But the brands themselves are also under pressure. Because their own logistics centers are full, and the autumn collection will soon come from the factories in Asia. The dealers, on the other hand, cannot currently buy anything. You simply lack the money.

“We have agreed with almost everyone to first suspend the upcoming deliveries until our OK comes,” says Martin Kerner from the Karlsruhe outdoor specialists base camp. “They are forced to join in the hope that an OK will come.”

But that is by no means certain. Because nobody in the industry knows whether customers will buy again as soon as the exit restrictions are lifted. Therefore Kerner is also careful and carefully thinks about what he has in store: “The last thing I want is no or the wrong goods when the shop is open again.”

Numerous sports brands now offer retailers long payment terms, sometimes up to five months. “It sounds good at first, but the day will come when you have to pay,” says Kerner.

70 percent less running shoes

But at the moment people are very unsettled. Since gyms and club sports are currently not an option, many people go jogging. Nonetheless, sales of running shoes in the US dropped 70 percent, according to the latest data from the NPD Group’s market researchers.

This doesn’t even include the recent worsening of the epidemic in America, just the week ending March 21. According to the NPD Group, business with sports equipment for young people has even declined by 90 percent, for example kick boots or baseball shoes. NPD analyst Matt Powell warns that the online stores could not even compensate for the shortfalls in local shops.

The picture in Germany is similar to that in the USA. “Business is still going on in online trading, but at different levels depending on the product group,” says Ortovox boss Schneidermeier. The sneaker manufacturer puma According to the Internet sales do not even reach ten percent of the usual revenue.

Brands like Puma or Adidas but are not as dependent on retailers as smaller labels. You run many of your own shops.

Even medium-sized companies like Ortovox do not have too much scope to stand by the merchants: “We support the dealers as much as possible. On the other hand, of course, we also have to pay our suppliers, ”says Schneidermeier.

Typically, the company leader would sit with dealers in May to discuss spring 2021 orders. Tailor Meier believes that this is currently not even an option.

Because of the crisis, the manager has meanwhile also adjusted the contracts with the dealers: temporarily, they can sell the Ortovox equipment on platforms such as Amazon. With all aversion to the Internet giant: At the moment the dealers can use every turnover, no matter where it comes from.

More: The big discount battle begins in retail.

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