Insulation outerwear sales performance may hinge on European presence

With a weak winter throughout much of the United States, sales of insulation outerwear are expected to drop this season — unless companies have a significant presence in Europe. As PrimaLoft's latest earnings show, chilly temperatures across the pond have helped keep sales strong.
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The lack of snow and warmer temperatures throughout much the United States this winter has undoubtedly hurt sales of insulation outerwear at specialty outdoor retailers this season, and might temper future orders for manufacturers.

But that doesn’t mean the winter of 2011/2012 will be a complete bust for the industry.

Outdoor brands with a significant presence in Europe could see another banner year. The old continent is having one of its biggest winters in recent history — starting with substantial snowfalls in the Alps in late December followed by a record-setting cold snap that brought snow as far south as Rome this past week.

Insulation provider PrimaLoft, which reported its latest earnings Wednesday along with parent company Albany International (NYSE:ABI), proved to be an early winner thanks to the chills in Europe. PrimaLoft’s fourth-quarter 2011 sales jumped 47 percent to more than $5.2 million, and its quarterly operating income soared to $2.23 million, versus $531,000 a year ago.

“Growth was especially strong in sales of insulation for outerwear in Europe,” officials stated in the release. Look for a similar story to emerge when The North Face, also with wide global reach, reports its earnings Feb. 16.

Europe won’t be a cure-all, however. The economic crisis there is just coming off its peak, which likely will mean European consumers spending less moving ahead.

PrimaLoft officials also noted another factor to its big boost in sales: “Retailers in North America and Europe placing orders for outerwear earlier than in past years, pulling sales forward.”

The earlier preseason order deadlines for next season’s product — some well before the true nature of this winter presented itself — also may have led some retailers, at least in the United States, to buy more than they will need.

--David Clucas

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