Johnson Outdoors (Scubapro) troubles

[redacted]

I typically agree with most of what you write, but in this case, I could not disagree more. While the problems of the scuba industry are deep, wide, and complicated, I don't think your quote above is one of them. In fact, it is my belief that many of the problems experienced today by scuba manufacturers results from actually THINKING that divers are their direct, primary customers. Much of the condition of the current dealer network can be attributed to the fact that the scuba companies have FAILED to realize who their primary, direct customers are. Had they realized this earlier, the treatment and support (and condition) of the dealer network would be much, much different.

Right, wrong, or indifferent....the customers that come to my store are customers THAT I OBTAINED, not customers that were obtained for me by a scuba company. If you think the commerce side of scuba is screwed up now, you can't IMAGINE how bad it would be if you were a direct customer of the average scuba manufacturer.

Phil Ellis
www.divesports.com

We are going to disagree on this one. Retailers and distributors are nodes in the business (distribution) network, but the customer is the end user whose ultimate use of the goods and services funds the entire industry. that customer is the reason the industry exists. If the customer is not satisfied and spending, all those other nodes from the small store to the manufacturing facility are for naught. This is not to say that the manufacturer should ignore the needs and desires of all those intermediate nodes, but if the higher node thinks he just has to satisfy the next node down and the final user is the retailers business, then it's just a train wreck waiting to happen. Every node in a business dependent on satisfied customers (the folks feeding $$$ into the business) needs to be focused on the source of the business's income, and make decisions on that basis.

 

[diver 85]

Without doing any research, what scuba companies are riding 'OK' @ this time???..Maybe we won't be able to buy anything but used equipment shortly??.....

 

[Stu S.]

Thanks to JCF. Scubapro sales going up is good, of course the cost of goods sold is not stated.

Scubapro is a brand that will probably hang in there. Has anybody been to the Scubapro Factory? Is there one? I don't believe they make much gear, as they sell their brand on things made all-over. That means they won't pay the price of under-used capacity, if sales go down.

Perhaps the most important asset of Scubapro is the brand itself.

 

[cool_hardware52]

Without doing any research, what scuba companies are riding 'OK' @ this time???..Maybe we won't be able to buy anything but used equipment shortly??.....

The world is awash in manufacturing capacity, i.e. a "bubble" as profound as any other in the news (housing, commodities, etc.)

The collapse of this manufacturing bubble will have a number of predictable, and as yet unexpected consequences.

Having said that rest assured that if there remains a market for scuba gear it will be filled.

The nature of the business will be changed, and some may not have seats when the music stops, but "find a need and fill it" will still carry the day.

BTW, I'm neither surprised or alarmed at the reports about Johnson Outdoors. A 70% drop in stock price is hardly unique for a supplier of discretionary, recreational goods.

I would *guess* there are far "weaker hands" in the scuba business that simply are not yet "in the news"

Tobin

 

[Ann Daly]

As a Scubapro Dealer and a small boat dealer, I suspect the bigger slowdown was in boat-related sales. We quit stocking boats in spring '06 when we saw inquiries decline, but we still special-order 3 or 4 new boats per year.... consignment/used boat sales are still decent. Check for stock quotes on Brunswick Corp (BC - from $20 to $3.30) or MarineMax (HZO - from $16 to $3) if you want to see a real bloodbath - and even at $3-ish, both are off their lows.

Four dollar /gallon gasoline has brutalized the domestic recreational boat industry, while sales have been down but still decent in our dive shop. Our dive charter business was up x2 this year - again, probably cheaper to dive with a charter than take out your own boat - but it could be because of our cool new RIB diveboat! $4/gal gas would also explain that sailboat sales are up, as are JOUT's Ocean Kayak line - no fuel required!

So before I even read details of the earnings report, I would have largely blamed boating accessory lines, even though all are the best in their space - but dive gear has slowed as well, I would suspect - it has for our store. Their dive revenue was up "largely due to dollars weakness" - lucky them.

.... and on the subject of tents, a friend who works for Patagonia (outdoor apparel) heard from his outdoor retailers that after the earthquake in China last spring, they weren't getting any shipments of tents from China as they were diverting them for temporary housing for the displaced. As he said, "if people think we're in a slow-down now, just wait until the stores have less to sell because of things like this".

Last spring, most knives & stainless steel-related items were on perpetual backorder due to the shortage of SS. Economies are not local anymore.

Scubapro has deep pockets, so they will ride this out. They have the best product, the best reps, and they are hugely supportive of their dealers .... all to ensure that divers will still have someplace to get their air even if all other dive retailers go under! Even now, they have a great free computer promotion that is helping my winter sales.

I could go on about the importance of the dealer network, but this is long enough !

BTW - Scubapro BC tag says "Made in Mexico" (close to California headquarters for quality control), Instruments are "Made in Switzerland" (precision engineering), most fins say "Made in Italy" (from Michaelangelo to Armani, the Italians are the best at design). Yeah, I'm biased toward Scubapro!

 

[Damselfish]

I don't get the argument whether the end-users or the dealers are the customers of the manufacturer, I don't see why it has to be either/or. I'd say they're both customers and treating either badly will catch up with anyone in the end.

 

[redacted]

I don't get the argument whether the end-users or the dealers are the customers of the manufacturer, I don't see why it has to be either/or. I'd say they're both customers and treating either badly will catch up with anyone in the end.

The manufacturers who recognize that divers are their customers participate on this board. they provide direct help and assistance to their customers. Other manufacturers do everything they can to avoid end users and force you to deal with an LDS; good, bad, or no where near you. They also refuse to participate on this board. If your LDS can't or won't help, you are SOL. What kind of customer service do you want?

 

[fireflock]

Beyond that, a lot of people see some of the ScubaPro policies as designed to prop up individual dealers instead of serving the needs of individual customers. For example, the lack of internet or phone sales means that SP wants you to buy from a local dealer, but they don't take steps to make sure that every dealer provides a quality experience. Same with parts...they want to force you to the dealer for service, but the quality of service can really vary.

The customer wins when dealers compete with each other on price, selection, and service. SP (and others) do what they can to eliminate the motivation that comes from competition.

Some customers have good dealers, and they like the experience they have with them. Others have access to lousy dealers, and SP doesn't leave those customers with many good options.

Rich

 

[Leadking]

If this is just going to be a bitch session about Scubapro, I am sorry I started the thread. Johnson Outdoors was used as an example only.

The purpose of my post, as I will state for the third time, is to have a dialog about the current economic state of the dive industry. I appreciate everyone's opinion but it is not what I wanted to accomplish.

 

[Ann Daly]

Beyond that, a lot of people see some of the ScubaPro policies as designed to prop up individual dealers instead of serving the needs of individual customers. For example, the lack of internet or phone sales means that SP wants you to buy from a local dealer, but they don't take steps to make sure that every dealer provides a quality experience. Same with parts...they want to force you to the dealer for service, but the quality of service can really vary.

The customer wins when dealers compete with each other on price, selection, and service. SP (and others) do what they can to eliminate the motivation that comes from competition.

Some customers have good dealers, and they like the experience they have with them. Others have access to lousy dealers, and SP doesn't leave those customers with many good options.

Rich

I guess SP isn't everyone's favorite, but I have had more comments of "You carry SP so I guess you're a real dive shop" and " I wouldn't have come in the door if you didn't carry SP" than anyone dissin' the brand. SP doesn't offer dealership to everyone, rather you actually must qualify and they expect their dealers to serve customers with a high level of customer service. If you have a bad experience with a SP dealer, let HQ know about it. I know of 2 nearby shops that have lost SP and it's more to protect the end-customer.

I love Internet shops, but they don't grow/perpetuate the sport of diving.... they don't offer classes, they can't take you on a dive charter, and they can't fill your tanks. Local dealers do this, whatever brand they carry. And if operating from the litigious USA, we don't stay in business doing any of the above 3 in a manner safe for our customers. Merchandise sales are vital to staying in business, even if it's just defog.

Marketing 101 taught me:
(1) Best Price
(2) Best Product
(3) Best Service
Of the above, choose which 2 you will be, because you can't be all three. Think Mercedes vs: Hyundai or Rolex vs: Swatch.

As regards service and sales of parts kits..... I am not comfortable selling spare parts for life support equipment so someone can do-it-themselves. Sort of like how "Do-it-yourself Pest Control" putting deadly chemicals into everyone's hands isn't really a good idea. Nor do I try to perform my own dental work. But you make a good point about if you're stuck with lousy local dealers..... I'm sorry your experience hasn't been good.

I choose product lines that protect me/my territory. If I don't have to focus on the competition, I have more time to focus on my customers - I have the best customers in the world and try to let them know it. And that is what I hope will carry our store through this tough time.... to LeadKing's original comments, Yes, it's tough out here. But diving is a great sport and will continue to grow in number.... maybe not everyone will be buying gear, but let's hope they keep diving!