What began as scattered flurries of late payment warnings from one or two vendors last year has turned into a blizzard of debt and payment demand letters for well-known mail-order supplier Nordic Equipment (www.nordicequipment.com). Despite the growing list of naysayers already sticking a fork into the company, owner Steve Crandall told SNEWS® last week that there is no coffin on order yet and that he believes the company reorganization and restructuring will keep the company alive and moving in the right direction.
"We are making efforts to mitigate expenses to get things back in line," says Crandall. "We had, like everyone else, an off year last year that came on the heels of a not very good year in 2000. We are restructuring on the financial and operation end and working with our major vendors and suppliers to keep the pipeline open."
Moving the store location in Mid-March from the high-rent district of Park City, Utah, to downtown Salt Lake City will save the company a bundle. According to Crandall, per-square-foot leases charged are a quarter the cost now.
Crandall also told SNEWS® that Nordic Equipment would begin to offer distribution of Pro-Ski roller skis and Solda race wax to U.S. retailers as another way of restructuring the business. Naturally, not all retailers we spoke with are chomping at the bit to acquire access to those products.
"It's highly unlikely we'll be buying product from another retailer who, by the very nature of their business structure pretty well dictates what price we have to sell our racing skis and packages at every year," one retailer who requested anonymity told us.
Indeed, numerous retailers around the country echoed the same sentiment, confirming that when the 30,000 Nordic Gear catalogs mailed each winter arrive, the prices inside establish what the market will bear and, accordingly, how much retailers will have to discount their skis to make a sale.
Not surprisingly, Crandall also told us that the company is refocusing its efforts on its successful mail order business, which is still where the majority of Nordic Gear's sales come from.
In addition, Nordic Gear will continue to carefully expand its summer market offering to help bridge the sales gap from one winter to the next.
"We will mail out between 20,000 and 22,000 catalogs this summer that include softgoods, rollerskis, running gear and some camping gear -- all of it requested from our very loyal customer base," says Crandall.
SNEWS® View: When Crandall purchased Nordic Equipment in 1999 from founder Torbjorn Karlsen, he quickly opened a retail shop in Park City -- first bad idea! Nordic Equipment's strength had always been a national mail-order following of passionate skiers, and Utah is not known as a hot-bed of walk-in Nordic sales by any stretch of the imagination. Though the moves he has made and is making appear to be the correct ones, we have to wonder if it can't be summed up as, a little too little and a little too late. From what we have learned, the debt is a big one. Mail costs are going up. Next winter, because of an overstock of gear that didn't sell this year, we doubt sales will be pouring in the door unless winter 2002 is amazing. Certainly, no one in the Nordic manufacturing community really wants to see Nordic Gear disappear. Consider that, by best estimates, the company is probably selling somewhere between 300 to 450 pairs of skis -- with boots, bindings, poles and wax to go with them. It is imaginable that should Nordic go under, the financial impact could be huge. Of course, one does have to consider that since most of Nordic Gear's sales are at the high end, and high-end buyers don't simply stop buying when a retailer goes away, that other retailers stand to gain should Nordic falter. We'd expect to see other mail order Nordic equipment companies -- such as Eagle River Nordic, New Moon, or Reliable Racing -- pick up any sales slack. So we'd imagine they're practically salivating over the possibility of Nordic's demise. Brick-and-mortar retailers who've long been forced to set prices by the Nordic Gear catalog certainly aren't shedding any tears at the company's travails. A few have even contacted us to say they're ready to increase their orders next year to be sure customers are served. All rather Darwinian, we'd have to say.