Some of the sharper Undergrounders may have noticed a slight downturn in the economy, and the Underground’s award-winning team of economists suggests the fly fishing industry’s noticed too.
Early in 2008 Scott Rods suffered some layoffs (though that had more to do with management issues than the economy). Then Winston laid off some rod builders, and recently, more bad news arrived on the horizon in the form of layoffs at Orvis (more on that below).
It seems as if I receive weekly notice of another independent fly shop going under, and yes, even the formerly flush pro BASS circuit is losing sponsors faster than I can LDR a skin-hooked 18″ rainbow.
Then the Baltimore Sun reported on the fading fortunes of consumer outdoor shows, and while everyone’s crossing themselves and hoping for a quick recovery, it’s clear that consumer spending in the “luxury” market (and fly fishing largely falls under that shadow) is in the dumpster.
Clearly, luxury boat sales are more affected than Chuck Furimsky’s Fly Fishing Show, which does offer cash-strapped members of the fly fishing community access to bargains, which may be the source of so much of AFFTA’s discontent with Furimsky’s shows. (Following quote from the Baltimore Sun story, which is worth a read):
Timonium’s Fishing Expo and Boat Show, which began its silver anniversary run Thursday and ends today, is a shell of its former self. Walking the floor of a show that used to be nearly three times as big and attract celebrities such as Ray Scott, founder of BASS, is as depressing as the news from Wall Street.
“Everybody’s looking for value for the dollar,” says Chuck Furimsky, owner of The Fly Fishing Show, which still appears in eight cities across the country. “Instead of a $700 rod, they’re buying two $150 rods. … There’s still a light at the end of the tunnel for us; it’s just not as bright as it once was.”
The Retail Connection
Then news arrived of layoffs at retailing heavyweight Orvis:
According to Hathaway, 27 employees, mostly salaried, have been laid off from the Orvis offices in Sunderland. He said 12 hourly workers were let go from manufacturing positions in Manchester.
“We’re facing a historic downturn in our economy in this country and the world and Orvis is not immune to any of that. We have to make difficult, painful decisions that will ensure the health of the company,” Hathaway said.
Orvis employs about 220 people locally, and has about 2,000 employees worldwide, according to Hathaway. No retail store employees were affected by the job cuts.
In an interesting blogger death feud sidenote, brownliner Singlebarbed suggests Orvis is more susceptible to the downturn than other manufacturers, and I find I wholly disagree.
From my online marketing perspective, Orvis is pretty much cooking the rest of the fly fishing industry on the marketing front (especially in the online world), and it seems as if most of their competitors don’t even realize Orvis has turned up the heat.
The organizations that survive downturns do so because they got their manufacturing and marketing ducks in a row during the good times – something the historically backwards fly fishing industry hasn’t (by and large) done.
Rather, it’s likely there are layoffs occuring at other fly fishing manufacturers, but they’re simply going unreported.
The Media Hurt
Naturally, the fly fishing magazine world isn’t immune; Ad pages at consumer magazines are down 11% overall, and fly fishing mags aren’t likely any different. (Bored? Count the number of ad pages in your favorite fly fishing magazine, and be prepared to use far fewer fingers than before.)
In fact – as I’m noting in an almost-finished opinion piece about the future of fly fishing media – fly fishing’s print magazines are facing the double-whammy of a bad economy and an accelerating reader shift to online media.
In other words, things are pretty much as you’d expect them to be in a “luxury” market facing the worst recession in our lifetimes, and with news that all our bailout money is being viewed by most banks as a “no-strings-attached windfall” (hint: lending hasn’t loosened, and bank execs are basically sniggering all the way to… well, the bank), don’t expect it to get a lot better anytime soon.
Still, here at the largely recession-proof Trout Underground, ad revenues haven’t declined at all, but that’s mostly because we haven’t talked anyone into advertising.
As for the rest of the fly fishing and sporting world, I’d like to point out that the cost of enjoying the outdoors hasn’t increased all that much (gas perhaps), so my prescription is to take two fly fishing trips and call the Underground in the morning.
In other words, though credit has largely ceased to flow, that’s not true of our major rivers.
See you on the river, Tom Chandler.
{ 10 comments… read them below or add one }
Companies that prove “recession resistant” often are those that innovate best – and have the most rabid following of fans. I wouldn’t describe Orvis as a poster child for either; cedar dog beds and mid calf Puce frocks sold to aging Maine spinsters just doesn’t engender much confidence.
Compared to other rod companies, their strength is in diversity, as the sale of fly rods isn’t significant to their bottom line. They are afflicted with competition in their bread and butter clothing arena – where their margins are higher than the competition – due to their “fly fishing” cachet.
The Aberchrombie’s and Banana Republic’s will be fighting for economic survival – and them precious retail dollars from all those Baby Boomers who thought they were retiring and now can’t … that’ll be the prize for the fellow best able to throw elbows.
Tom Rosenbauer said it best, ” …without our fly fishing heritage, we’d just be another rag vendor.”
That’s no longer enough – in light of a once in a lifetime economic event. KBarton10(Quote)
Most of the big-box stores will probably weather this recession pretty well.
Cabela’s is a good example. If sales of high end fly rods drop off the table it won’t affect them at all since sales of fly rods, fly fishing equipment and fly tying tools and materials is just a drop in the bucket in terms of all the stuff they sell. Heddon17(Quote)
Drive by rambling in no particular order:
- I’ve heard some manufacturers are now giving certain shops extended credit terms (i.e. like a year) – don’t know if that is normal but it definitely seems absurd considering that credit still has to be funded somehow, and the doubtfulness that manufacturers are getting said funding from Citigroup;
- Have noticed a few shops that are now dropping lines and dumping product at or below dealer prices – may be they didn’t get the better terms, may be a prelude to their shutdown, or may be a sign of that specific manufacturer’s deepening woes (i.e. no credit themselves – see above);
- Have noticed some shops that I would only go into out of desperation for a certain pattern (i.e. they’re generally uppity tools) seemed to have lightened up, and proprietors are in the shops more often – maybe the owners’ got a clue that the enthusiasts hired streamside may not necessarily be their best salespeople;
- I think everyone should take a look at the Catch Magazine and This Is Fly models – the formats are surprisingly enjoyable, and they don’t seem to want for advertisers; there is also the ‘no dead trees’ spin which some folks will really appreciate;
- I don’t see the online guerillas like TC does, but I can certainly say that even walking by Orvis garners some pleasure; I don’t see glaring proof that Manchester understand the online world outside of affiliate marketing and nodding to a blogger now and again – and maybe the dearth of activity from others enhances their presence too; Either way, the people in the Orvis shop completely get it, and the fact that they have captive fly rod manufacturing means they have a big leg up (reference: the seminal work in this arena done by KB last year); I wouldn’t bet against Orvis as a result of the people factor;
- The online/social/mixed media/messaging part is still a huge moving target – I think all the players would be wise to sit and think really hard about both the strategy (and it’s fit within the existing org) and tactics that are available there before assuming a Facebook group is panacea; I’ve noted successes, but see them as few and far between – simply reading Groundswell ain’t gonna get you there; From a outsider looking in that has touched a decent number of industries, I’d say a complete sales channel overhaul might be in order first;
Sure, the fly fishing industry is living in the Neolithic period – but they can either take some risks and survive, or sit on the behind and die – the time to sow seeds is immediate. Michael(Quote)
kbarton: “Companies that prove “recession resistant” often are those that innovate best – and have the most rabid following of fans.”
I agree, but would suggest Orvis is doing both better than all but a few in the industry. While most fly fishing companies continue operating their static, content-poor Web sites – ignoring the marketing practice with the highest ROI in the universe (email/enewsletter marketing), Orvis has an active email marketing program, an active paper newsletter, customer reviews on their Web site (including audio & video reviews), an infrequent podcast, free publication of one of the best-selling “fly fishing for beginners” books of all time… I could go on, but you get the picture.
In other words, Singlebarbed, you ignorant slut…
Heddon: The big boxes will have problems all their own – and they’ll likely experience downturns across almost all their product lines (if foreclosure rates continue, we predict healthy growth in the tent market) – but you’re right; they have the resources to weather this stuff. The independents don’t.
Michael: I’m (slowly) writing a piece about fly fishing’s online media landscape, and one of the conclusions I come to is that the online magazines designed to emulate paper magazines will need much more than an issue every couple months to survive, for all sorts of reasons.
Right now, they’re new and interesting, but if you think advertising is easy to come by, take a closer look at how few ad pages are found in the latest issue of This is Fly.
Lest I be accused of excessive blog partisanship, I also cop to believing the standalone blog is largely dead as a viable (meaning making enough money to sustain the effort involved) media property.
In terms of social media marketing, it’s an interesting place – though I still counsel my clients to cover the online marketing basics before investing a ton of time in things like Facebook, though I believe those channels will do well for the companies with the wherewithall to be transparent, authentic, and smart.
For me, this is an endlessly fascinating subject (after all, I write a copywriter’s blog and am re-launching my engagement marketing blog). Too bad the conversation seems to be occurring here instead of in the marketing departments in the fly fishing industry. Tom Chandler(Quote)
TC: You very likely know the publishing economics better than I, so I’ll defer. Look forward to hearing more on this subject, as well as social media.
As for the last point – I don’t think that conversation is going to start in the present vacuum. If it is anything like old school industry, it has to be handed to them, prepackaged, on a silver platter. The opaqueness of the ROI makes that quite difficult (but not impossible) to do. Michael(Quote)
The flyfishing industry grew like weeds alongside Wall Street ever since A River Runs Through It, funded by the very brokers, lawyers, and realestate moguls that are now seeing their industries reset to reality. I don’t wish anyone misery in these times, but when the dust settles, only those will survive who provide products and services at a price willing to be purchased by consumers. Most of the fly fishing customers at my lodge are able to catch as many fish on a $150 rod as on a $700 rod. Jeff Reed(Quote)
Michael: The vacuum point is very well taken. I will say a couple of companies have been offered this stuff on a silver platter, and while I can only speculate as to the reasons why (and they’re mostly not that flattering), they declined.
Jeff: Will the same be true for lodges like your own? Do you expect the high-end lodges to fold, or will the big-dollar and value-priced options remain while the middle disappears? And for that matter, how many lodges do you think market themselves effectively? Tom Chandler(Quote)
The short answer is: some high-end lodges (both hunting and fishing) in my area have already shut their doors. And more will follow. Making a living running a lodge is difficult, unless one does just that: run it to make money. My lodge is one of the few businesses I own that actually made money last year; and I believe the reason is that we have always stayed focused on “lodging” first, and fly-fishing second; of course, it helps to have a “location” next to the highly trafficked Yellowstone Park. It is very difficult, in this environment and even prior to this environment, to run a lodge profitably with upscale amenities like a chef, on-site guiding staff, shuttle, drinks and, of course, the most important thing – a spectacular location. The ones who have a better chance of surviving will outsource dining (or keep it real simple) and perhaps even outsource the guiding. Of course, there will always be the “hobby” lodges where a very wealthy individual owns it and lets someone else operate so they can show it off to their friends. For the rest of us, we’ll run it like a real business. The good news for consumers is that “package” prices will fall this year…and we’ll all get back to basics: the fishing and the location. Heck, I personally would rather skip lunch to have a chance at another trout :) Jeff Reed(Quote)
Jeff: Thanks for taking the time to reply. It’ll be very interesting to see how things shake out over the coming year. Tom Chandler(Quote)
The cost of enjoying the outdoors has increased! For 2010, the Non-resident fishing license for Oregon has jumped from $61.50 to $106.25. Such a deal!… Larry Cote’(Quote)