The Trout Shop Blog

February 23, 2012
Have You Been to a Good Fly Shop Lately?
Jerry Lappier
There's a storm brewing that could change fly fishing forever. Mass distribution of fly fishing products seriously threatens the fly fishing culture as we know it.   
 
In today's information packed world, being concise is a virtue.  This newsletter was written with industry professionals in mind, but has a ton of relevant information for everyone who fly fishes today.  I've attempted to keep this article as short as possible, but due to the importance of the information, it is still somewhat lengthy. I hope you will read the article from the beginning to the end and voice your own opinion.  You can make a difference.

May 28, 2011....     
 
According to Cabela's in Billings, Montana, the Missouri River below Holter Dam was running very high, was dangerous and nobody was taking clients on the river.  Where did they get their information?   
 
The Historical Fly Shop
 
Fly shops earn your business. You can count on independent fly shops to provide you with honest and accurate fishing reports, quality products and unique services.  It's their unwritten responsibility to the fly fishing industry.  Promoting fly fishing is not something fly shops work towards, it's what they do and why they exist.  Professionals that operate fly shops are driven by their passion for fly fishing and innately pass their love for the sport onto customers in the form of local advice and instruction.  Seeking a high quality of life is at least equal to the desire to make money.  Giving back is a huge part of the mantra.
 
Customers do their part to keep the engine running.  They reward fly shops for their dedicated work by purchasing goods and services from them. Advice is free, but somehow the lights need to stay on. Many fly fishing customers go well out of there way to throw support behind the efforts of their favorite shops. It's one of the many great things about the sport.  When given the option, we're happy to say that most fly fishing customers prefer to shop at fly shops.   
 
This simple, but effective reward system has built The Trout Shop's success since 1989.  If nothing else, customers want solid information every time they head to the stream.  Dedicated fly fishermen know why it's important that local fly shops stay in business.  By buying local, they know they'll always have a convenient conduit to the river.  Without local fly shops, where will you get honest and accurate fishing reports?  You want the truth, the whole truth and nothing but the truth.  Not even the internet provides that.   
 
The Trout Shop's History
 
Like all businesses, The Trout Shop is always seeking ways to grow and, frankly, make more money.  At first in 1990, we had a fly shop in Craig, Montana, that provided guide services, shuttles, boat rentals and a few tackle items.  We tied our own flies and never got paid. The building we operated out of was built in 1888 and needed lots of repair.  Remodeling a dilapidated building was not our forte, but we had a few friends that helped steer the ship in the right direction. With their help, we added a few rooms to our building and were able to provide lodging services for our Missouri River guests.  After a second year of remodeling, we had seven rooms available for rent. Food service was our next hurdle.  At the time, we thought our fly shop was simply too big at 250 square feet.  We shoved the fly shop into a corner, enclosed an awning and turned the remainder into a small café - we provided full service at that point.  
 
We didn't know that the movie A River Runs Through It would be released in 1992.  Financially, the timing couldn't have been better for us.  We had an established location and all the necessary products and services needed to successfully fly fish the previously unknown Missouri River.  The stimulus the movie provided has never been matched.  Fly fishing became popular.
 
Increased popularity provided an obvious, but unattended area of growth for us - tackle sales.  Our fly shop truly was too small to meet our customers' and our own personal needs.  Parrothead Fly Shop, located across the street from our lodge on Bridge Street, closed after five years of doing business. We picked up the lease and staked a claim to our new and somewhat larger location.  Increased tackle sales became possible.
 
Moving our fly shop proved to be a good idea. It opened the doors to coveted fly fishing dealerships.  Getting premium dealerships in those days wasn't easy. Minimum annual purchase requirements by the manufacturers and a relatively small market limited our ability to grow our dealership portfolio, but we pushed forward nonetheless knowing a dealership's built-in value would pay off in the end.  Despite the river's popularity, Simms and Sage would not open dealerships north of Helena (45 miles south of Craig).  The sales representative for both companies did not want to open us because he wanted to protect his dealer in Helena.  No slices of those pies were available to us.  It took a personal visit from K.C. Walsh, President of Simms, and three years of persistence to obtain these power brands.  
   
Our calculated bets on the dealerships we obtained were rewarded. Like we hoped, tackle sales steadily climbed along with the popularity of the sport and the river.  Still needing more space to display our burgeoning tackle business, we purchased a house two blocks from our lodge at the Craig Interstate 15 Exit.  It only took two years before the house turned fly shop proved to be too small.  We added 1600 square feet more onto our retail sales floor and added a deli to our operation.  Today, we have Starbucks Coffee and approximately 2200 square feet to operate from.
 
The Demise of the Historical Fly Shop
 
Our fly shop is too small again.  Even with the added space, the morning hustle to get to the river seems crowded at times.  Adding onto our fly shop seems like an obvious solution.  We have the space and the approvals necessary to make it happen.  So what's the hold up?  The shaky economy is one solid reason to hold off until better times.  The radically changed relationship between retailers and manufacturers is a better reason to be hesitant.   
 
Here's why:
 
According to the American Fly Fishing Trade Association's (AFFTA) marketing survey that was prepared by Leisure Trends in 2008 for year-ended 2007, the following key findings are noteworthy:    
 
Note: The data below is the most recent available from AFFTA.  A new report has been authorized and will be available to AFFTA members later this year.   AFFTA did not prepare a market survey from 2009 - 2011.
  • Total sales in the fly fishing industry were $804.8 million dollars.
  • Tackle sales in specialty stores and independent sporting goods stores accounted for $657.9 million dollars.
  • Tackle sales in national chain stores accounted for $146.9 million dollars.
  • Tackle sales in specialty stores declined 9.5% from the peak sales period in 2004.
  • Tackle sales in national chains increased 13% from 2006 to 2007.
  • Independent, single-location fly shops accounted for 45.4% of the retail tackle sales.
  • Specialty stores, regardless of the number of storefronts, are the most likely to be actively introducing new participants to fly fishing.
Fly shops are feeling the pinch.  From the Leisure Trends survey, "An interesting development in 2007 was the growth of both chain sporting goods stores and specialty (multiple) operations and the decline in specialty (single) and independent sporting goods operations.  Compared to 2004, year 2007's contribution from specialty (multiple) operations (+56.8%) grew much more dynamically than sales among specialty (single) operations (-16.8%).  This led to an increase of $71.4 million in total sales for specialty (multiple) operations (such as Sportsman's Warehouse) and a decline of $130 million for specialty (single) operations (fly shops) from 2004". Ouch! How did the national chain big box stores do?  They did just fine, thank you.  From 2006 to 2007 (the beginning of mass distribution), big box stores watched their fly fishing sales increase 13%.  So, everyone is growing except fly shops. 
 
Why Did Fly Shops Fall on Their Faces?   
 
The erosion of the historical industry started with the decision by the power brands to distribute to Cabela's - the 1,000 pound gorilla.  In 2004, Cabela's went public and netted a fist full of dollars - about $160 million.  They had no problem spending it and premium fly fishing manufacturers had no problems accepting it.  The gorilla's expansion plans were aggressive to say the least.  They wanted to sell every fly fishing brand out there. They wanted to distribute all of their products in every state in the country, pronto.  With $160 million in the bank, they had a nice war chest available to them.  Cabela's wasn't enough.  Bass Pro, LL Bean and other large chains were opened up simultaneously.  The move to big box was on.
 
When Simms and Sage, the industry's power brands at the time, changed their distribution practices from "limited distribution in specialty stores only" to "distributing through big box stores and as many other outlets as possible", the industry changed.  It happened over night.  Suddenly, the power brands had changed the distribution game and nearly every premium manufacturer followed.  Consumers can now find all the industry's premium brands in every nook and cranny of the universe. If you can't find them in a retail store, you can find them in countless on-line stores.  In our forty-person, two block town of Craig, you can find two Simms and two Sage dealerships.  Simms opened the 2nd dealer the day they opened their doors for business.  It took Sage one year longer.  Seeing the writing on the wall, we greatly expanded our Patagonia offering and opened our doors to Hardy, Scott, Nautilus and others. At least for now, they all adhere to limited distribution policies.   
 
If all things are held the same, manufacturers increasing product distribution decreases each fly shop's piece of the specialty item pie. We don't live in a vacuum and things are not being held the same.  According to takemefishing.org, the number of fly fishing participants in the United States declined to 5.6 million in 2009 from 6.1 million in 2006.  In a four-year period, 8% of the market slipped away.  Current participants are significantly older (48% are over 45) and more affluent (42.6% make more than $75,000 a year) than other sports. An aging population and their spending are disappearing from the industry quickly.  A crippled economy isn't helping either.  The facts are the facts. What fly shops face today is a declining market that is saturated with products.  Manufacturers are not blind.  They can see the problem, but must struggle for their own survival. Fewer sales per fly shop and smaller margins are, and will continue to be, the net result.  Perhaps this is why 18 fly shops in California and industry veteran Kauffman's Streamborn closed their doors for good in 2011.
 
In the 1990's thru the early 2000's, manufacturers and fly shops were close partners in the fly fishing business.  The decision by manufacturers to mass distribute products essentially ended the closeness and the love affair.  What used to be a valued dealership is now simply a popular fishing brand.  A fly fishing dealership has little goodwill value because there is nothing "special" about the dealership's products.  Instead, fly fishing products are commodities because they are mass distributed.  The luster has been rubbed off the brands.  You can get the same thing at the same price everywhere.  And, people do.  With a stroke of a pen by the power brands, the historical fly shop's goodwill value declined greatly.
 
What's Wrong with Big Box?
 
While manufacturers knew that the very fly shops that made their brands special would be upset with their distribution changes, they could not resist the lure and simplicity of big sales to big box stores with the potential for even more.  Besides, at the inception of mass distribution policies, the economy was strong and independent fly shops would not be harmed financially (or so they thought) by the decision.  Everything would just keep growing like the housing market.   
 
Simms defended their decision by stating that marketing of the Simms brand in Cabela's mass-produced catalog would inevitably drive more Simms sales in specialty stores. Only the Bible is distributed more widely than the Cabela's catalog.  Simms may be right that co-branding with Cabela's will help sell the Simms brand.  That's great for Simms' effort to grab market share, but does nothing to help sustain the core selling outlets - fly shops.  Proportionally, fly shops are selling more Simms and less of brand X, but they are not selling more overall.  They are selling less.
 
Fly fishing gorillas can hurt independent stores in many ways beyond their marketing strength.  For example, gorillas can make large one-time purchases from Sage.  Cabela's persuaded Sage to reintroduce their popular XP fly rod at a heavily discounted price specifically for them.  Sage's response to fly shops inquiries surrounding XP sales was straight forward, "Sage will happily produce a special run of fly rods for a store if the store can purchase a similar large volume of rods".  The odds of that happening are very slim. Specialty stores do not have stock holders' money to play with. Gorillas can issue you credit cards and provide reward points that can be redeemed to lower the price on your next purchase (AKA: discounting). Credit cards are only issued by very large companies and discounting is expressly forbidden by the manufacturers.  It seems as if everyone is selling the same popcorn these days.  Cabela's, however, can package it up and sell the same thing for less.  Manufacturers will continue to sell to gorillas.  That, you can count on.  
 
Big box stores are great for manufacturers. You don't need a Harvard Degree to understand why manufacturers sell to them. Unfortunately, their short term gain is not worth the long term loss to the industry.
 
Whose Side is Manufacturing Really On?
 
In a letter dated February 12, 2012, to The Trout Shop, Simms' President and Vice President stated, "Thanks to your support, we enjoyed increasing demand for Simms products in 2011, and based upon your commitments, we believe Simms and our Dealers will enjoy a record 2012 season.  Thank you."  While we still support the Simms brand, we have focused our commitment and our spending on only their core products.  Simms makes great waders, boots, jackets and other technical pieces.  To a great degree, the direction that Simms appears to be heading is responsible for our product mix changes.  Those in the industry know what a McFly Shop is. We're not a McFly Shop and work hard to bring new brands to the market and differentiate ourselves from our competition.
 
Simms goes onto say, "Like many of you, we have concerns about the continuing challenges facing specialty fly shops.  Simms believes specialty fly shops are critical to the future viability of both our business and our industry.  The #1 Core Value of our company is "Specialty Matters Most", and there isn't a Simms employee who doesn't understand the critical role specialty retailers play in fly fishing."  We applaud their words, but how can they undo the damage already done?
 
Simms is cleaning up its distribution by banning sales on ebay and Amazon.com.  Whether online or through a shop, Simms feels dealers should compete on the basis of the promotion of their own retail locations, and not based primarily on the Simms' brand. Improvements are being made to Simms' Authorized Dealer Site to make it easier for dealers to buy Simms' products.  Core product inventory will be kept higher for improved delivery. Visitors to Bozeman will see a shiny new building with 30% more production space as they head to Yellowstone Park to fish.  You can stop in to see and be educated on all Simms products in their dazzling new showroom, but you can't buy anything there.  On Simms' website, they will continue to highlight both their Affiliate Dealers and local area fly shops.  Their continuing goal is to drive foot traffic to dealerships.  E-Blast promotions and informational and promotional coupons will be included with all products shipped direct from Simms - you heard correctly; Simms is going to sell direct to the public starting August 1, 2012.  It all sounded so good until that point. They promise to sell at full retail price, pay all state taxes and charge shipping.  They plan to be the high cost alternative where you can buy all that Simms has to offer.  Hidden in the message is the notion that Simms present distribution system is not adequate and they need to take the bull by the horns themselves. Fly shops and Cabela's aren't getting it done.  How hard will it be to open the cash registers to customers in their new showroom?  Hopefully, that doesn't become necessary and change due to a stroke of a pen. 
 
Questioning the fly fishing industry's manufacturer's loyalty to fly shops is warranted.  There are many breaches of faith to point to, but one example stands out in the crowd.  Last spring, large quantities of Simms G4 waders and Sage Z-Axis rods were found at Costco stores nationwide.  Both manufacturers cried foul by blaming Costco for engaging in dirty buying practices. Costco made direct purchase inquiries to both companies.  Both companies rejected their offers. Somehow, however, approximately 200 Simms waders and 200 Sage rods ended up in Costco stores at heavily discounted prices despite Simms and Sage's purchase rejections.  How did that happen? Simms won't disclose who the "industry insider" is that bought the waders that ended up at Costco.  Sage won't disclose who the "freight diverter" is that sent the Z-Axis rods to Costco.   Costco is known for dirty buying practices, but these sales should have raised some eyebrows at both Simms and Sage before the orders went out the door. Facing a fly shop revolt, Simms and Sage bought up the Costco inventory at Costco prices.  Both companies should get credit for doing the right thing, but their selling actions clearly show their eagerness to get products to the public.   
 
It's no wonder that fly shops are simply pissed.  Introducing a 1000 lb. gorilla to the market and simultaneously mass distributing to a declining market was/is too much for many fly shops to withstand financially or spiritually.  
   
Is There a Solution?
 
How can a fly shop compete in the big box world we live in?  Good question. Working hard and providing superior service is a given, but what else can be done?  Matching the marketing capabilities of large chain stores isn't plausible in the independently owned retailer pool. The stakes are too high. Manufacturers control all the "P's" of marketing and tie the hands of dealers. They control the product's design, price, place of sale, packaging and promotion.  In the pre-mass distribution days, manufacturer's firm grip on their products marketing was acceptable to dealers.  With limited distribution, a fly shop knew it would get a piece of the pie and were firmly behind the power brands.  Times have changed. Stringent marketing practices no longer work for anyone involved.  A new solution is needed.
 
Fly shop's need the ability to change their way of doing business to compete and remain viable against the gorillas of the world.    Rather than having promotional events for products, fly shops often act like pawn shops and negotiate deals on a per customer basis.  Those who don't make clandestine deals with their customers find that consumers are trained to wait a year and get last year's discontinued premium products relatively cheap.  In the age of the internet, this marketing practice leaves zero profit or a net loss for retailers.  Check out ebay, Sierra Trading Post or Red Truck Fly Fishing. They are loaded with great deals on last year's products that didn't sell at the lofty prices mandated by manufacturers.  Unless you have to have the latest and greatest, where do you shop?
 
AFFTA to the Rescue?
 
AFFTA simultaneously represents manufacturers and dealers on policy issues and probably can't solve this problem, but they should try.  AFFTA is the sole voice representing the fly fishing industry.  They are in the middle and know all the players necessary to save the traditional fly fishing industry that we all hold near and dear to our hearts.  Fly Shops are the core of the industry - both Leisure Trends and Simms agree.  AFFTA's mission is to promote the sustained growth of the fly fishing industry.  Are we headed that way?  From a historical fly shop's perspective and from AFFTA's own marketing survey, the answer has to be no.  
   
  AFFTA's efforts are focused on achieving three strategic objectives:
  1. Growing demand for fly-fishing products by attracting an ever expanding audience to the sport.
  2. Promoting better business practices and professional development opportunities for members.
  3. Providing a clear, loud voice to elected officials and government agencies on issues ranging from the protection and rehabilitation of fly fishing habitats to tax related issues important to the fly fishing community.  
AFFTA does a decent job on big issues. Educational business seminars are provided at the International Fly Tackle Dealer show and AFFTA is active in conservation issues.  Special programs and discounts are available to members.  Being a member provides benefits.
 
Through their Discover Fly Fishing Program, AFFTA hopes to "introduce people to the sport of fly fishing and drive traffic to their retail members and specialty stores".  Discover Fly Fishing's facebook page helps keep the public abreast of member activities. Without programs like this, the fly fishing retail environment would be worse.  AFFTA promised to unveil a revamped and improved program for 2011.  At the International Fly Tackle Dealer Show in New Orleans last year and on Bourbon Street, nobody seemed to know anything about the revamped program.  Perhaps we missed something. Disappointing.......    
 
AFFTA's board is stacked against fly shops.  Of the 255 AFFTA members listed on their web site, 131 are fly shops, 66 are guides, 32 are media producers, 9 are travel agents and 17 are manufacturers.  If only entities interested in tackle sales are counted, fly shops outnumber manufacturers by nearly 8 to 1.  Yet on the 16-person AFFTA Board of Directors, manufacturers outnumber fly shops by at least 10 to 1 despite "AFFTA's Nominating Committee's mandate to give due regard, and act in good faith, to assume that the membership of the Board of Directors fairly reflects representation of all segments of the fly-fishing industry".  Board member Jeff Watt's bio states, "I have been involved in all facets of the Fly Fishing Industry outside of manufacturing. I have tied flies commercially, guided, worked retail and am getting ready to start my 18th year as a manufacturers' representative. I currently work for or have worked for several of the largest fly fishing vendors and have been instrumental in bringing fly fishing products to the largest retailers in the country. Years ago these retailers were not considered outlets for specialty retail, now they might be viewed as a saving grace."  That doesn't sound like a lot of love for fly shops.   
 
AFFTA's Nominating Committee is likewise stacked against fly shops.  In June of 2011 AFFTA announced, "Based on the current board term expirations, there are currently three Board of Director seats to be filled with this election. To maintain the diversity of the board as outlined in the AFFTA bylaws, the association is strongly searching out at least one Media / Public Relations / Marketing /Associations /Government /Educational and one at large open seat." No fly shops joined the mix, but Jim Murphy, president of Hardy North America, did.  If fly shops make up 51% of the membership, why is there only one fly shop board member?  This huge disparity between the present board makeup and what's pledged in AFFTA's bylaws serves as a symbol of the way the market works and of the greater problem - manufacturers rule the roost.  Meanwhile, fly shops struggle to adapt to the rapidly changed environment and often find themselves looking in the rear-view mirror with hand cuffs on.  Where will the shakeout leave fly fishermen?
 
Being skeptical of AFFTA's efforts towards helping fly shops is reasonable. Somehow, the degrading dealer / manufacturer relationship trend has slipped through the cracks of AFFTA's foundation.  Is it any wonder that dealer attendance at the annual IFTD Show continues to decline?  Perhaps it's time to look within the fly fishing industry's organization and not on the perimeter for viable solutions towards the longevity of the industry.  AFFTA needs to recognize the plight that fly shops face and the impact their general demise will have on the industry.  Strategies need to be proactively developed that provide fly shops with a unified voice within an industry that innately depends upon them for survival.  The time for action is now.
 
The Solution
 
Quality, branded products with on-time delivery are found at most fly fishing manufactures.  The business side of things is handled. What's missing in the industry is a genuine understanding that manufacturers are pulling the rug out from under the people that built their brands and who personally cater to the long term viability of the industry.  Manufacturers' business models are broken.  They need to be revised to return value to their dealers.
 
According to AFFTA's own marketing survey, specialty stores are the most likely place to introduce new participants to the industry.  Fly shops can't bring more people into the industry if they are out of business.   Consumers need to understand that their choice of retail outlets makes a difference; that they can help. Products and their prices are the same regardless of where you buy them.  From a manufacturer's perspective, it doesn't matter where consumers purchase their products as long as they get bought.  If you're a fisherman, it definitely does matter where you purchase your products.  Preserving the fly fishing tradition in great part depends upon consumers recognizing how small and fragile the fly fishing industry is. Doing your part by buying from local businesses that live on the sport and provide superior service will save the industry.  AFFTA can't do it alone even if they try.   
 
Moral of the Story
 
If Cabela's Billings store had called The Trout Shop on the Missouri River on May 28, 2011, they would have found that the Missouri River below Holter Dam was fishing well with nymphs until you reach the Dearborn River confluence.  At that point, the river became dirty, but was still fishable especially with streamers.  Dry fly fishing had to wait until runoff subsided. Anglers were fishing the entire 34-mile blue ribbon stretch of river despite the elevated flows.   The Missouri was one of only three viable fisheries in the entire rain-drenched state.  Fishing was from good to great.


Randi Swisher - 2012-03-13 11:35:53
In response to Jerry's post, I'd like to provide some facts regarding the American Fly Fishing Trade Association (AFFTA). AFFTA's mission is to promote the sustained growth of fly fishing by developing the consumer market for fly fishing products. The trade association is comprised of 16 Board of Directors (15 elected Board members and the President) who represents 5 categories within the fly fishing industry. Each category represents one sector of the fly fishing industry: retailers, manufacturers, sales representatives, media/PR marketing/associations/government/educational and travel/guides/lodges. The make-up of the Board currently has no fewer than two members representing each of these categories. In the history of AFFTA, the current AFFTA Board has never been so diverse in nature and well represented of the ENTIRE fly fishing industry. The world of retailing and business has changed significantly. The line between who is a retailer and a manufacturer continues to be blurred. Some fly shops have their own private label products on the shelf and some manufacturers are choosing to sell direct. AFFTA recognizes this and will offer programs that adapt to it. We will continue to offer programs for retailers at IFTD and is looking into offering webinars to help modernize the fly fishing industry. We encourage retailers to attend IFTD where they can meet and discuss their issues/situations directly with the manufacturers. That is exactly what should be happening at the trade show. AFFTA's Consumer Recruitment committee is responsible for the Discover Fly Fishing program. This committee has had its challenges no doubt. The committee has looked at a variety of options from producing written instruction guides to promoting youth events to a full on marketing campaign. The fact of the matter is none of these efforts have proven to the leadership to be worth investing significant amounts of money in. We believe we need to deliver a program that doesn't just introduce people to fly fishing but actually turns them into fly fishing anglers. In the absense of a clear path to success we will not invest in projects just to say we are doing something. We are currently evaluating in-school education programs similar to what the archery industry has done. When we think we have the right project, we will find it with the industry's support. AFFTA, through its Government Affairs & Affiliates Committee, advocates on behalf of its members, keeping watch on laws and policies that significantly affect our members' business and the sport of fly fishing itself. The committee released its Year End Policy Review to the public at its recent board meeting in Denver. AFFTA is firmly committed to the principle that access to healthy habitat creates recreational opportunity and that recreational opportunity creates economic activity for our members. That equation drives our decisions on what public policy efforts we lend our support to. The report highlights key areas of interest to AFFTA and its members such as conservation funding, clean water, the National Fish Habitat Partnerships, wilderness and roadless areas, and fishing access. In addition to developing policy positions, AFFTA offered its opinion, often in coordination with our colleagues, on 20 different federal policy matters in 2011. Jerry is clearly someone who has very strong opinions about the current state of the fly fishing industry and the direction that he believes this industry should be heading. Individuals with this type of commitment, passion and energy are exactly the type of individuals that should be involved with and run for a seat on the AFFTA Board. AFFTA will be accepting nominations for board elections in the near future, and we would encourage Jerry to apply his energy to making the industry stronger and to growing our sport by running for a board seat by getting involved. We need more individuals that can help grow, shape and mold the future of our industry.
Todd Frank - 2012-03-09 12:38:23
I am in a different industry that shares several brands with Specialty Fly shops, the outdoor industry is ahead in many ways of the fly fishing business. By ahead, I mean we saw this all happen a few years before it hit the fly fishing business. I have many friends and work with a number of reps who crossover in the fishing business. This, in the end, is about growing business by broadening the base of distribution, plain and simple. Manufacturers now have the luxury of having it both ways, we bitch and send in a check.... they listen with a deaf ear and cash it. It is hyper competitive and a shrinking market at a time when vendors need to increase sales just to meet financial obligations, It is as if the sales managers say here is the number we need to hit, based on financial issues not real and attainable sales goals. I have watched with much interest the fly fishing market change, I have been in your shop to buy a shuttle and a few incidentals and get the word, I try to save all those purchases for my destination, but as someone who owns 8-9 rods, 3 pair of waders and all the other stuff I could possibly need I simple cannot pay for what the shop really offers me when I stop in on my way to the river. I try but as a guy who owns a shop i seem to have all that I need except the word. I like to remind my vendors of a line that a sales manager once used that has resonated with me. Everyone gets a turn at the front of the line. The masters just get to stay a little longer. Simms has had a great run but like all things it will come to an end. Cloudveil tried and in doing it took to many shortcuts and made too many mistakes in design and implementation. Patagonia simply did not put the resources into making better product than Simms. They may be next, Hell it could be someone like Kokotat who builds the best Drysuits in the world, and know gore as well as anyone. You can only speak with your checkbook, and I do every day to express my displeasure of how a vendor is conducting business. Cannot always walk away totally, but soon enough a competitor will come along and replace the top dog. We of course need to find a way to hang on long enough to have a chance. All it would take is someone to build product that is as good and commit to only selling it through a specialty channel, then have the resources to actually do it, the trout shop along with EVERY other shop who can build a brand and make it happen would gladly Jump on board. Specialty builds brands, sadly we are never the ones that allow them to cash out, and clearly that is what I see happening every day. One rep told me we were great pioneers for brands, but then pointed out lots of pioneers ended up with an arrow in the back. thanks for taking the fight public. Todd Frank, Owner The Trail Head Missoula MT
Jerry Lappier - 2012-03-02 22:02:02
We sent this newsletter out through e-mail to a significant number of anglers. As you would suspect, the comments are largely sympathetic towards independent fly shops. Here's a small sampling of the feedback. Thank you for being a positive influence in this important issue. Reader Comments: 1. A friend sent it. You are 500% correct ! What's happening is that the demand is generally decreasing and the bean counters demand increased sales ! $800 rods just don't have that big a audience any more PLUS most customers have learned that if you look around you can always find someone who'll discount them. It’s not just in the fly industry.......its In every segment ! Factories make you a "deal " and 2 months later offer an even lower price to your competition. Its all about some asshole making his projected sales number ......and fuck the long range repercussions. Squeezing out the most margin is the name of the game weather it be private label or closeouts purchased for a promotion. It seems that a mix of PL , traditional high end , deeply discounted closeouts, and unique regional specific items are the combination it takes to stay profitable. You should think about PL items like flyboxes tippet materials etc. I will be happy to guide you to OEM sources. Regards and what's your gut feeling about water levels this year ? Too early to tell I'd think 2. Dear Jerry: OMG..there is little that is sacred anymore. I read your entire newsletter with great sadness.I realize that we live in a world so concentrated on the bottom line, addicted to corruption and greed, and so eager to leave behind traditions, integrity, fairness and legitimate business practices. The world view today is that yesterday's ways are "old fashioned, and behind the times" and to get ahead business no longer believes conduct should look like your father's way of doing business". Well the x-gener's have created a "me" generation. We are not an informed electorate, and many of those making decisions today have never really had to tough it out ......so "cut throat" is in, everyone is an expert on economics, and the long term consequences of today's actions are not part of the thought process. Wall street is doing well, speculators are having a ball with the gasoline and oil industry and the global economy is close to needing hospice care. Actions say why worry about tomorrow, and they really don't do they? TY always for being the 'good guys" out there. At least when there is no money nor electricity..hopefully there will still be fish. Is there anything we can do to help save the industry?? TY again.EXCELLENT / Im using that all Spring Long to preach the word !! 3. I applaud your letter to the community of anglers, manufacturers and fly shops world-wide. Well written. I am glad there are folks like you in this business. Keep it up. 4. The successful fly shops have slick websites, sell online, move it out before it gets dusty and provide great customer service, both online (why have an online fishing report that is not updated daily?) and in the shop. I count many fly shop owners as friends and I haven't seen Cabelas putting on great barbeques for their customers in Craig, Mt. 5. Good luck. we hope to see you this summer. Tough news Don W. died last week. it's of pleasant memories with you guys and Craig. Always the best. 6. Jerry, Mike, Mike, whoever else is around there, How’s things? Thanks to Chad a bunch of us had the pleasure of reading your excellent write up, “Have You Been to a Good Fly Shop Lately?” and wanted to let you know that it helped deepen our commitment to ‘Good little Flyshops’. We’ll always be faithful Jerry, if it’s not to the Troutshop it’s to one of the local small shops up here in Canada. You know the part you forgot was the great friends you make shopping in the little shops, you never remember the zit faced puke that helps you at Bass Pro but we’ll never forget the job you and Mike and the boys (& girls) do for us down at the Troutshop, you’re one of the finest in the business. So, bravo Jerry for standing up for the little guy and defending a vital cornerstone of this passionate sport we all love. Without great little flyshops to drink coffee in a talk about the ones that got away, where would the folklore be passed on? Not around the family dinner table that’s for sure, no one eat’s at one anymore and fishing with your grandpa is so 1990, the little shops have to be there to teach the young. Great job! 7. Important letter you wrote. I will be glad to help almost any way I can. One suggestion: hammer away at the shortcomings of shopping at big box and specialty warehouses, like you did with the opening comments about river conditions. People think it’s all about saving money. What they fail to consider are the relationships, the specialized information you provide about gear, conditions, hatches, river conditions, guides, accommodations, weather and on and on. Did I mention 4th of July BBQ? Find a way to itemize – in specific detail -- all the ways consumers lose when they abandon independent fly shops and the intimate connection they provide to fly fishing. You guys add great value to the fly fishing experience that nobody else can or does. See you in late June, 8. Jerry, Excellent. Have you submitted to the trade rags? To the Wall Street Journal? It is analogous to all things retail in America. 9. Thanks for saying what we’re all thinking…..This sucks. 10. Amen…brother….great leatter…lets no forget that when you spend money in a local store, the profits remain in the town. 11. Jerry, this is why I quit using simms and sage.. Patagonia only. Fuck them, you guys (shops) brought them to the dance and made them the darlings of the industry. 12. Jerry, well written, great piece. Couldn’t agree more. Hope to see you this fall. 13. Wow! Great Article. I’ve to to read it again to get everything out of it. Good Job and good luck – I look forward to discussing it with you some day. Is there any organization that represents just the fly shops? I know anglers can help by continuing to purchase from fly shops, but are there are actions we can take. I hope your article catches on like wildfire! 14. Dear Jerry, Read your letter with great interest. Is there a movement to get a better representation on the board at AFFTA? 15. Being a destination shop, we understand that Anglers come prepared with all they need….aside from good advice and information on where to fish there sometimes isn’t much else they leave the shop with. If you have ever fished a remote destination where gear and flies are not available for sale, they you will know what it will be like when your shop closes. Thanks to all who patronize my little shop in…… 16. Very well said! And I agree wholeheartedly with all of your points! 17. Well< fish with xxxx, xxxxxxx and the last 4 fly fishing items I bought (boots, waders, fly reel, and (used) fly rod were from your online shop. We will se u in the spring and summer and I’m bringing 9 guys who maybe will b uy something……good luck! 18. Great article and I can’t agree more about the big box stores and the need for consumers to support the local independent shops. Do you have a link to this document, I’m scheduled to be the guest speaker / tier at the xxxxxxxx xxxxxxxx club in March and would like to post this to them. P.S. I was in the shop this past Monday, we we’re spending a few days in Great Falls and I couldn’t come home without a side trip to the shop. 19. Amen…great job Jerry. This is why we come back year after year. 20. Jerry, well stated. You have my support 21. I rely on your shop and as a outfitter for knowledge for my customers when we go to the mo. Thanks for all the help 22. Great E-mail. I read it all. I wish you luck. I have found that most of the manufacturers treated me well but some of them are terrible. Now they have set up Guide Sales that take away from the shops also. Guides recommend a product to one of their customers and then get paid when the customer buys direct from the manufacturer. It just gets worse. Anyway, I enjoyed your letter 23. Thanks Jerry…..not a lot of surprise on this but a huge amount of negative feeling from just about everyone I talk to. Our rep called me to assure me that any inventory on high demand items will be allocated first to dealers….we’ll see. The amazing thing is that this whole thing is being couched in the guise of something good for dealers. RIGHT! We made our bed with Simms and expected them to stick with their promises and we have no alternative but to bend over! Don’t you love the timing…..again its designed to help us after we’ve placed our preseason orders? 24. Good luck, Jerry, After 40 years in the ski business, I retired to fish and ski, knowing that our industry faced the same game. Keep up the good work, your real customers will reward the true specialist and keep you going, but adjustments must be made. Goodby Sage and Simms, good luck when Cabela’s discovers the pain of doing business when its all about price. Those aren’t the clients you want. Best Wishes, 25. You did a super job of writing this and conveying the issues from the gorillas. I never heard of Red Truck Fly Fishing before this article. I checked them out and sure enough they had wide selection of Simms products and looked like knock offs by Loop. I understand the frustration of helping a small company grow and become a leader in the industry. Then being betrayed by them because of selling products to the monsters. I would bet that Simms brought in some new people, bean counters and people from outside the industry only concerned about the bottom right corner of the P&L. They throw down numbers on paper and huge projected sales increases, which creates bigger and bigger profits with no regard to the people who got them there. They turn from a great company for the clients into sociopaths. Two words--- BULL SHIT!!!!! How quickly they forget who enabled them to become a successful company. 26. Nice piece. I have shopped in you store many times starting the year you opened or the year after. Met Leon Chandler in the park by the pump and learned to love the mighty Mo and to tied and fish the trico's fishing and camping in Craig. I dont have any answers but lots of ideas. Having lived through the boom of fly fishing in ways I am glad the boon has passed and scaling business to an appropriate size is important. I don’t buy my gear from Cabellas or Costco, never been in Costco. I shop at our local natural food coop even though potatoes are 10% more than the big chain store. I value honesty, human interaction and good information and whenever I come to Craig I always buy stuff at your shop. Doing what you do best is what you need to do. I honestly quit coming to Craig during the peak years it was just too crowded too often for my taste. Not saying you couldnt find fish and some spot to fish but boat after boat after boat some not able to not cram you made me think why do this here? You will survive cause your good and lots of folks like you guys but perhaps this is not the time to expand and perhaps smart downsizing is the wise choice. A big ass company 200 miles away bought out the small community based hospice program I helped start and managed for 17 years; I didnt get vote of course, only the bean counters did. They bought us out cause we were good. 7 core staff left and were not replaced and the bean counters were glad to lose the extra payroll and the new users of the business dont even know what they miss now in the lost support and expertise. Keep it up, keep telling newbies what they dont know that they need to know and best of luck.
Ray Schmidt - 2012-02-29 17:37:33
Yikes! Reading the Simms post is like listening to a big bank taking over a small home town bank and telling it's customers that nothing will change. Because manufacturers like Simms has decided to sell directly to consumers is not the end of the world, unless you are a speciality fly shop. The is the very beginning of a trend that other manufacturers will most certainly follow. Our industry has changed dramatically and we as small speciality fly shop owners must change as well. I have lived very well without Simms for over 5 years, so can we all.
Jerry Lappier - 2012-02-29 14:56:01
Simms is missing the point of the article. The point of the article is that the power brands decision to market to Cabela's and other chain stores has led to a general decrease in all product sales at all specialty stores. It's not about Simms product sales perse. The data they are using to defend their actions is only valid for Simms specific products. An increase in Simms sales is a reflection of Simms marketing strength. When a market is declining, about the only way to increase sales is by taking it away from someone else. Simms is good at that. The correlation between Simms opening big box stores and our sales of Simms products was never mentioned in the article and is not a valid point. There's less money coming into the industry due to an aging demographic. Additionally, fly shops are seeing declining sales while big chains are gaining. We used industry data not our store sales to prove our case. The problem is with the big picture not any individual store. The article expressly states that consumers can make a difference by choosing to shop at specialty stores rather than chain stores. By doing so, the culture of fly fishing as we know it will continue. This is what we hope for. The newsletter is not a statement regarding The Trout Shop's sales record nor is the letter about our declining sales of Simms products Certainly, our purchases from Simms have declined because we have branched out to other product lines in an effort to differentiate ourselves from our competition. The Trout Shop has the benefit of being located on a world class river that sees plenty of foot traffic. Not many fly shops have this advantage. Our business is doing fine because we provide local services and don't rely completely upon retail. We have always supported the Simms brand. Our inventory level of Simms products is greater than any other brand in our store. While Simms is used as an example to prove our point in the article, we did not wish to paint Simms as a sacrificial lamb. If nothing else, we hope that Simms takes this moment to do something bold in support of the people who built their brand recognition - fly shops.
Simms Responds - 2012-02-28 18:55:12
Simms began selling to Cabela's almost a decade ago. Since that time, the Trout Shop has been outspokenly critical of Simms for this decision, claiming that this added distribution had a negative impact on their store. However, our sales data support that extending Simms distribution has significantly benefited specialty fly shops across North America, including the Trout Shop. Since 2004, our specialty dealers have grown at an accelerated rate when compared to Cabela's or any of our national accounts. In the case of Missouri River Trout Shop, the value of their annual purchases of Simms' products increased by 175% since we started selling to Cabela’s. During that period the Trout Shop’s purchases of Simms’ products generated an estimated $XXX,XXX in retail sales. We know that our decision to open the neighboring fly shop was frustrating to the Trout Shop. However, we only did so after the Trout Shop made a major commitment to the competing line from Cloudveil. We also have had our frustrations with the Trout Shop. Our business with the store declined by almost 25% in 2010 and 2011, during a period when our average specialty fly shop sales grew robustly. It should be apparent to anyone who visits the Trout Shop that this decline was a direct outcome of their effort to promote competing brands, and had little or nothing to do with competitive sales of Simms products from Cabela’s. Obviously, it is a free market and the Trout Shop can decide which brands they choose to carry and promote. Making it easier to explore and purchase the entire Simms product line is the primary goal of our recently announced distribution change. These changes do not undercut our specialty dealers, but instead are designed to promote those retailers, while allowing consumers to purchase some of our product offerings that are difficult to find. As we have announced, this effort will be accompanied by several online strategies that will directly benefit our specialty dealers. It is our goal that our supportive retail partners will be the key beneficiaries of these changes.
Jeff Ferguson - 2012-02-25 09:08:03
The successful fly shops have slick websites, sell online, move it out before it gets dusty and provide great customer service, both online (why have an online fishing report that is not updated daily?) and in the shop. I count many fly shop owners as friends and I haven't seen Cabelas putting on great barbeques for their customers in Craig, Mt.
Paul Samycia - 2012-02-24 00:47:51
Being a destination shop we understand that Anglers come prepared with all they need......aside from good advice and information on where to fish there sometimes isn't much else they leave the shop with. If you have ever fished a remote destination where gear and flies are not available for sale, then you will know what it will be like when your shop closes. Thanks to all who patronize my little shop in Fernie B.C
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