Olympics boost sports merchandise sales despite bad economy | Business| Economy and finance news from a German perspective | DW | 12.02.2010
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Olympics boost sports merchandise sales despite bad economy

Sports merchandise is one of the few industry sectors that have been generating profits lately. Hype surrounding the Winter Olympics and the upcoming soccer World Cup has fueled enthusiasm for the industry's products.

An Olympic torch in Vancouver.

Even as Vancouver's slopes were empty, the Olympics generated sports sales

Despite declines in sales and profits for many industries, some sectors are experiencing growth despitef economic crisis. Sporting goods producers and retailers are thriving thanks in part to a healthy boost from the Winter Olympic Games being held in Vancouver, Canada.

In 2009 the industry's turnover in Germany grew by 3.5 percent, from 7.1 to 7.3 billion euros. Sporting goods sales, it seems, are less dependent on economic cycles than they are on weather.

Klaus Jost of Intersport, the country's largest alliance of retailers in the sports industry, said he believes an obvious reason for the increase in sales is that as the baby boomer generation gets older, they want to continue being just as active as they always were.

"They think, 'I can't stop playing sports at 50 or 60 when I will have 30 years to live,'" he said.

In addition to the Vancouver Winter Olympics, the upcoming soccer World Cup in South Africa has helped to generate enthusiasm for sporting goods, he said.

"We don't just sell gear, we sell the emotion that goes along with it," he said.

A stadium in South Africa.

The upcoming World Cup in South Africa promises even more sales

Slippery slopes

However, not everything is selling better this winter. Skis in particular have lost some of their lustre, and 38 percent of winter revenue is derived from their sales. Possible reasons include warmer winters in previous years and the fact that 59 percent of German skiers prefer to rent their equipment rather than buy it.

Winter sportswear, on the other hand, is booming. Roughly half of the money spent in sporting goods stores nowadays goes towards clothing, as outdoor brand names like Jack Wolfskin, North Face and Columbia have become a fashionable part of Germans' everyday wardrobes.

It isn't only fashion that is driving increased sales of some sports gear - safety wear is booming too. After a horrific skiing accident last year involving a German politician, helmet sales grew rapidly. An estimated 80 percent of children and 60 percent of adults have traded in their winter hats for ski helmets.

Werner Graun, CEO of helmet maker UVEX, said the company is prospering and its sector has grown by more than 10 percent.

Although the day may come when everyone in the world is outfitted with a helmet, UVEX hopes for continued growth through a simple strategy, according to Graun.

"Be creative, have good ideas, and employ creative workers to develop innovative products that the market needs… Our three-layer helmet, for example, goes above and beyond all of today's standards," he said.

A ski jump practice in Vancouver.

A gold medal can also be a prize for equipment manufacturers and retailers

Technology and design

Other German companies, such as ski maker Volkl, are also banking on innovation. Product manager Andreas Mann is confident the company's new adjustable skis will be a success. They can be adjusted based on height, weight and ability specifications, which skiers can have calculated by a computer and then enter into their skis using a key.

"Of course you won't magically become a better skier, but you will become a better skier faster," Mann said.

Volkl skis are already popular among professionals. Stefan Kogler, who will represent Germans in alpine disciplines at Vancouver, has a pair. Tanja Poutiainan of Finland and Manfred Pranger, the current world slalom champion from Austria, are also fans. If any of these athletes were to win an Olympic medal, it would do wonders for the company, which is already doing better than most.

Beyond safety and performance innovations, the sporting goods industry is also increasing its focus on the environment. If the International Trade Fair for Sporting Goods and Sports, which recently concluded in Munich, is any indication, environmental protection is playing an increased role in sales. Whether they're gear, clothing or accessories, many products are being offered with a natural or recyclable material option.

The industry has begun to take warnings from environmentalists seriously and has recognized that if the climate warms up, it will have serious consequences on their bottom lines.

Author: Sabine Wuttke / gps
Editor: Sam Edmonds

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