Scubapro online sales

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yknot:
First, wouldn't the minimum sales price just be north of cost? Any attempt by SP to justify uncompetative business practices is going to backfire. Consumers now have substantial options to SP.
Any minimum price would still need to allow enough margin for dealers to be able to pay for the overhead of running their shops.

Large volume on-line retailers who do not maintain a storefront or full service dive shop have an advantage there as they can sell items for not much over cost on a margin that would bankrupt local dive shops. Consequently, if/when on-line sales are allowed, there will still need to be price controls to ensure the LDS's have an adequate margin to stay in business. If you bankrupt your dealers, your parts and service support go down the tube along with your sales and that is in nobody's best interest.

Traditionally, the industry standard used to be a 100% margin, which for low volume sales of slow moving and expensive to stock items, may provide a 10% profit - not a lot but enough. However with many products, the margin is well over the industry standard and, in my opinion, Scubapro and other companies with excessive margins will need to substantially reduce the MSRP if they want to stay competitive. Their stuff is very good, but not all that much better than the competition, and things like warranty hassles on internet purchased equipment detracts from the over all value of the product.

I suspect that for many customers Scubapro prices are just too high and they are going elsewhere to purchase less expensive equipment. It's a question of making a lot of money off a few customers or making a little less money off each of a lot more customers. Once you get beyond the point of diminishing returns, sales drop off more than you can compensate for with price increases, which then only serve to further reduce sales.

I think part of the problem industry wide is that many advances have occurred to lower production costs (example: a one piece molded resin second stage case costing less than $3.50 to produce compared to the much higher cost of forming and/or machining at least four parts from brass, then brazing them together and chrome plating a brass case.) but those savings were never passed on to consumers, rather the company profits and dealer margins just increased.
 
Scubapro equipment is very expensive as compared to other modern equipment of the same ilk. But as BMW proves, some will pay for the security of a long established brand with a history of quality. But, Johnson Outdoors which owns Scubapro (a publicly traded company) has been losing money, even though revenues are up - not sure whether Scubapro specifically is losing money, BUT overall, their sales are down slightly.

Johnson Outdoors

Johnson Outdoors Inc. Announces Fiscal 2005 Fourth Quarter and Full Year Results

-- Diving sales were down slightly despite a strong performance in North American markets and favorable currency translation which did not fully offset weakness in international markets. The UWATEC(R) Smart Tec(TM) computer is on track to become the Company's most successful dive computer introduction in its history.



RACINE, Wis., Nov 17, 2005 (BUSINESS WIRE) -- Johnson Outdoors Inc. (Nasdaq:JOUT), a leading global outdoor recreation company, today announced sales of $77.1 million for the fourth quarter ended September 30, 2005, an increase of 2% compared to $75.6 million for the prior year quarter. Net earnings for the quarter improved to a net loss of $3.4 million ($0.39 per diluted share) versus a net loss of $3.8 million ($0.44 per diluted share) for the prior year quarter. For the full year, the Company reported sales of $380.7 million compared to $355.3 million for fiscal 2004, representing a 7% increase year-over-year. Net earnings for the year were $7.1 million ($0.81 per diluted share), an 18% decrease versus prior year.

FOURTH QUARTER RESULTS

Fourth quarter results historically reflect a loss due to the slowing of sales and production of the Company's seasonal outdoor recreation products. Sales growth in the Company's core brands more than offset the expected decrease in military revenues for the quarter. Key changes included:

-- Diving revenues increased slightly due to solid growth in North America and favorable currency translation, as weakness in key international markets continued.

Total Company operating loss of $4.6 million in the fourth quarter was flat compared to the same period last year. Operating losses resulted due to a number of factors, including among others:

-- The significant drop in military sales compared with the prior year quarter resulting in a $2.9 million decline in Outdoor Equipment profits.

-- Increased commodity costs, particularly metal and resin costs affecting the Company's Marine Electronics and Watercraft divisions, along with higher freight charges.

-- Restructuring costs of $1.6 million compared with $2.5 million in the prior year quarter as the Company continues efforts to improve efficiency and profitability long-term in the Watercraft and Diving divisions.

The Company reported a net loss during the seasonally slow fourth quarter of $3.4 million or $0.39 per diluted share, an improvement over the net loss of $3.8 million or $0.44 per diluted share in the prior year quarter. An improved tax effect on losses in the current year quarter was the primary driver of the lower net loss.
 
It is interesting that SP is owned by Johnson Outdoors, which is a large conglomerate of several outdoor recreation companies. In taking a look at their website, http://www.johnsonoutdoors.com/, I noticed that few of their other brands are sold in the same kind of retail distribution channel as SP. For example, you can walk into just about any Dick's Sporting Goods store and buy a Eureka tent, Old Town canoe, Minn Kota trolling motor, or Hummingbird fish finder. What you can't find at Dick's is any SP equipment; not even fins, masks or snorkels.

I would like to know how closely SP is managed by Johnson Outdoors. I would guess that they are not very autonomous, and that a great deal of the marketing and sales decisions are made by the execs at Johnson.

Overall, Johnson posted total sales of $380.7 million in fiscal 2005, with diving sales comprising $79 million (20.75%). Compared to fiscal 2004, the change was less than 2%. So, they did not have that bad of a year with regard to their scuba sales.
 
Swan1172:
It is interesting that SP is owned by Johnson Outdoors, which is a large conglomerate of several outdoor recreation companies. In taking a look at their website, http://www.johnsonoutdoors.com/, I noticed that few of their other brands are sold in the same kind of retail distribution channel as SP. For example, you can walk into just about any Dick's Sporting Goods store and buy a Eureka tent, Old Town canoe, Minn Kota trolling motor, or Hummingbird fish finder. What you can't find at Dick's is any SP equipment; not even fins, masks or snorkels.

I would like to know how closely SP is managed by Johnson Outdoors. I would guess that they are not very autonomous, and that a great deal of the marketing and sales decisions are made by the execs at Johnson.

Overall, Johnson posted total sales of $380.7 million in fiscal 2005, with diving sales comprising $79 million (20.75%). Compared to fiscal 2004, the change was less than 2%. So, they did not have that bad of a year with regard to their scuba sales.
Partly the answer is that trolling motors aren't sold in the same manner as scuba equipment. By this I mean that no one is going to tell you that if you buy your motor from an unauthorized retailer that death could result. ScubaPro continues to live by methods that have been shown to be out of line with the times. As an older line of equipment they are too dependant on the LDS's to get the gear into a perspective diver's hands. That way of thinking says you must maintain a strong dealer base regardless of what market forces are showing. Other brands have realized that the best way to expand market share is to make themselves as accessable and available as possible thru formerly non-traditional methods like the internet. If all of the LDS's suddenly ceased to exist tomorrow I bet a scuba aisle would suddenly appear at Dick's.
 
DA Aquamaster:
In fact SP is making efforts to reduce on-line sales. I was told by our LDS owner that SP is now actively tracking purchases of larger quantities of regulators to ensure the shop that bought them is selling them on site. This is designed to prevent shops from buying quantities of regulators and then selling them to LP or other on-line dealers at discounted prices for re-sale on line. In effect, SP is trying to reduce the supply of grey market regs for on-line dealers to sell.
.
hahahahahahahahahahahahahahahahaaaaaaaahaaa
 
SP is paddling against a strong current. I have three SP regs and none of them were purchased at an LDS at 100% mark up. Two were bought online, one used, and the remaining one was purchased from an instructor friend. That plus the airspeed regulator maintenence guide, the available online diagrams, a few tools, and the readily available maintenence kits, and I have a lifetime of use. For those who do not want to do their own maintenence (that would be the majority), I am confident that options will present themselves. Artificially constraining this is never going to end up SPs way.
 
Hollywoodivers:
hahahahahahahahahahahahahahahahaaaaaaaahaaa

don't laugh too hard, eventually it makes you puke, just like thinking about it....
 
DA Aquamaster:
I suspect that for many customers Scubapro prices are just too high and they are going elsewhere to purchase less expensive equipment. It's a question of making a lot of money off a few customers or making a little less money off each of a lot more customers. Once you get beyond the point of diminishing returns, sales drop off more than you can compensate for with price increases, which then only serve to further reduce sales.

I was just in a SP shop saturday looking at BC's for my wife. It could have just been a sales pitch but the salesman said that ScubaPro is getting ready to have a price increase accross the board. :shakehead
 
cerich:
don't laugh too hard, eventually it makes you puke, just like thinking about it....

OK... they put the serial number on the fin, too..

Let's see who win eventually. SP vs. modern trends....
 
jpsexton:
I was just in a SP shop saturday looking at BC's for my wife. It could have just been a sales pitch but the salesman said that ScubaPro is getting ready to have a price increase accross the board. :shakehead

No sales pitch at all, from what I have heard the are going up 8% min. at wholesale, that should add considerably more at retail.
 

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