CASE STUDY
ON THE DOCKS: Retailers and manufacturers can only hope that tariffs—especially on China—come down, but prices are sure to continue to go up.
likely underestimate it. They’ll likely assume relatively low tariff rates and raise prices later if needed, so you have all upside and no downside. In the short run, that could work, but it might mean some long-term costs to pay on down the road.” His best guess on the retail side is prices rising 5–10%, with bigger in- creases in outerwear. “We know it’s going to be more expensive; we just don’t know what product or whose,” he said. “But consumers are already stressed about inflation and their confidence isn’t strong right now.” Barr agrees that prices will increase. “Nothing is insulated from increased prices. Our manufactur- ing cost of goods has risen by 10– 20% due to the fabric, buckles, and webbing that our USA suppliers have to import for us. We’re asking our buyers to buy brave and letting them know that if the tariffs come down we will lower our prices.” Allen adds that any price increas- es will affect retailers’ open-to-buy. “Just because brands change their price doesn’t mean retailers have more dollars to spend,” he says. “If they’re charging us more for prod- uct then we’ll have to charge more.” The take home? These are unprecedented and unpredictable times, with the tariffs disrupting the outdoor industry and reshaping how and where products are made, priced, and delivered. “There really doesn’t seem like there’s any end in sight, and if it goes on prices will still increase to a point of where customers may not be able to buy them,” said Barr. Added Allen: “I’ve never been through anything like this. It feels like April 2020 after COVID. There are big changes coming but we have no idea what their effects will be yet. Everything is changing so quickly it’s hard to plan as a buyer.”
Predicting Unpredictability How can retailers wrap their heads around the ever- changing tariff drama? By Eugene Buchanan
switch, resulting in higher prices or reduced profitability. And it’s not getting any better. “It’s still chaos out there,” says KAVU founder Barry Barr, whose product line relies heavily on overseas production. “The adminis- tration adding 100% more tariffs on China’s imports, on top of the 37.5% tariffs on top of normal duties, is devastating. No one has any answers except to charge ahead and hope they come down.” The tariffs are also squeezing retailers who have to pass these higher prices onto consumers. The main problem, says Wes Allen of Cody, Wyoming, retailer Sunlight Sports, is the uncertainty. “We still don’t have clarity on how much our products will cost next spring,” he says. “We’re having to do our open- to-buys without a complete picture and have to re-forecast at least one selling season, maybe two.” And retailers are the last to know anything. “We still don’t know what pricing will be for spring or fall ’26 and are having to re-plan 20 times,” he says. “Retailers are the last ones to get that information.” It’s like predict- ing the weather, he adds. “No brand wants to over-estimate how much their product will cost, so they’ll
O ver the past two decades, the outdoor industry has faced one challenge after another, from 9/11 and the Great Recession to post-pandemic inventory issues and now tariffs. Long relying on global supply chains to meet growing demand, this latest hurdle—additional taxes on imported goods—is affecting retailers and brands particularly hard. “Tariffs are eventually passed along to consumers through higher prices and continue to have a negative impact on all segments of the retail industry,” says Jona- than Gold, VP of supply chain and customs policy for the National Retail Federation. “Retailers rely on global supply chains to provide their products at affordable prices to U.S. consumers. The current tariffs and threats of additional ones have created uncertainty for retailers, who make sourcing decisions six to nine months in advance of selling seasons. While they’ve implemented
a number of mitigation strategies, including front-loading imports and absorbing the additional costs, those strategies aren’t sustainable in the long term.” The main effect of tariffs is increased production costs, as many outdoor brands make their products overseas to take advantage of lower labor and material costs. But when the Trump administration imposed tariffs on these goods, many outdoor products were suddenly subject to a price hike affecting every- thing from finished goods to such components as zippers, fabric, and buckles. Already operating on thin margins, outdoor companies face a difficult choice: Absorb the added cost, pass it on to consumers, or find alternative sources. While larger brands might have more flexibility and resources to shift production, smaller companies —a significant portion of the outdoor industry— often lack the scale to make such a
GRASSROOTS STORIES 7
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