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overstocked, few are seriously so, and we should be okay by end of winter for F/W categories. Watersports and rental were seriously over-forecasted, and it'll be another year before their inventory levels can be right-sized. Wage growth: Payroll has ballooned due to all the factors that are well known. We do not yet have a reliable model for how we're going to deal with it, and it's certainly a long-term threat to the viability of the business. Cost of doing business is up across all expense categories except rent (that's locked in), and initial and retained margins continue to erode. Wage compression: ose most skilled and with longer tenure are seeing newbies hired at wages that make the differential unmotivating. Keeping them will be a big problem." — Larry Desaulniers, Peak Sports "Too much inventory. Manufacturers who all thought they were the smartest folks in the room nine months ago all seem to be buried in inventory. We all have trimmed our buys from specialty up through the dotcom and co-ops, but the brands who are publicly traded and leaned on REI and other big retailers are in the most trouble. e 'Launch Code' for [this season] has been punched in the computer so we are managing by being noisy about the bad choices vendors are making and asking for help via mark down credits and some RTV for things that did not ship complete. We are also cancelling all backorders and most back up orders have been put on hold or cancelled. In addition, we [trimmed] forecasts for spring orders by around 30%. Outside the inventory issues, the overall operational costs of labor, freight, utilities and all the other costs associated with inflation have created lots of challenges to the bottom line. Even though the sales increases we have seen are great, they have mostly been eaten up by cost increases." — Todd Frank, e Trail Head "Inventory management has always been a challenge and even more so since the pandemic. At the start of COVID we were overstocked and desperately trying to sell through our stock, then in 2021 we couldn't get certain items at all and missed sales because of it. Now at the start of 2023 we have a better forecast, but it may change depending how people shop with the looming recession and inflation. We are planning for it by keeping our inventory levels a little tighter and choosing to ASAP over taking large preseason orders. Secondly, inflation has been noticeable and will be interesting to see what happens. All of our vendors have raised prices and we will see if customers still find value in the same product. e Patagonia Torrentshell used to be $99, and this fall it will be $179! at is an extreme example, but most prices have gone up 5-10%. We have followed vendors' MSRP and continue to provide our excellent customer service which is why folks choose to still shop with us when it is so easy to buy online." — Jake Dickerson, Wild Iris Mountain Sports What are you most optimistic about in 2023? "I am most optimistic about our used/ consignment section in our store. I am convinced that it is a business category that [DTC] manufacturers and big online folks will never be able to duplicate what we are doing efficiently. e cost for a seller to list a single product online and manage that single sale is extraordinarily high. We can do it here every day and it is bringing in new consumers who have been mostly drawn to 'discount online' and been burned by the issues surrounding buying online (fit, timing, et cetera). It is another piece of our business that creates curiosity on the part of consumers." — Todd Frank, e Trail Head "I'm most optimistic about the quality of the team I have. Higher wages have brought better people on board, and they function at a higher level, too. is makes it possible to execute on initiatives with a higher likelihood of successful completion." — Larry Desaulniers, Peak Sports "We are optimistic that outdoor recreation will continue to be a constant driver of income to our area. ere was a recent study (by the Central Wyoming Climbers' Alliance) that shows climbers alone bring $4.5 million to our economy here in Lander, Wyoming. We also have a solid core staff that are experienced with our POS and management that allows time off and peace of mind for the management team." — Jake Dickerson, Wild Iris Mountain Sports Corvallis, Oregon outdoor retail specialist Peak Sports. 24 • January/February 2023 sportstyle • sportstylemag.com OUTDOOR INSIGHT / RETAIL

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