Ski Business: How will higher tariffs affect ski gear?

Importers took heroic steps to hold retail prices this season, but they can’t do that forever.

“Nobody knows anything.”

This pithy epigram by the celebrated screenwriter William Goldman was aimed at the movie-making biz, but it applies equally to a ski trade trying to adapt to the exigencies of a market battered and bruised by sudden shifts in tariffs.

The on-again, off-again gyrations of the tariff rates being applied by the U.S. government—inspired by the misbegotten notion that reciprocal tariffs would correct trade “imbalances”—has kept the small teams that run subsidiaries and distributors in this country in perpetual turmoil. Any change in pricing precipitates changes in every document at every stage of a product’s odyssey, from creation to delivery to the eventual customer. When preparing for several possible scenarios, the workload on an already trimmed-down staff is crushing.

The only way to avoid having to re-price one’s product
line(s) was to act early and cope with the consequences. For most brands, the tariff upheaval began before all of next year’s orders had passed through customs, leaving them vulnerable to a price bump too great to be absorbed. Not a single brand, however, wanted to jack up prices to cover the full cost of the anticipated tariff hike. Holding prices near to what was originally forecast meant cutting close to the bone.

For context, the tariff mess arrived on the heels of three straight seasons of budget cuts created by sales expectations that exceeded demand. The Covid pandemic induced a 50 percent surge in sales that was naturally unsustainable. So when the tariff bogey appeared, there wasn’t a whole lot left in operational costs that could be trimmed. Some of the tariff surcharge would have to be passed along to dealers.

Wholesalers can’t just increase prices to cover new tariffs. They have an ingrained fear of raising dealer costs, because dealers, in turn, are afraid that any price increase will scare away the inflation-scarred consumer. They’ll cut orders before they boost retail pricing. Looked at through a dealer’s prism, the shop isn’t just buying a ski (or boot or parka); it’s matching a price point they know their customers will accept. The manic pressure to keep costs down is mostly driven by a fear that if prices continue to escalate, soon the (discretionary) ski trade will price itself out of business. The time-honored scheme is to offer equipment at price points staged in $50 increments, and no one wants to risk pricing a product outside the mainstream.

To illustrate this point, consider the evolution of the Minimum Advertised Price (MAP) for one ski, the Head Titan, since the 2019–2020 season. (The MAP is the benchmark used to determine dealer margin and the most likely price the consumer will see until after the holidays.) In 2019–20, the MAP for the Titan was $999. This year, the Titan’s MAP is … $999. This price stability endured despite a couple of design modifications that raised the ski’s performance range but didn’t raise its cost to the dealer or the consumer.

For example, if we look back about a decade ago, the Head Supershape i.Titan was a flagship product both within the Head collection and the carving category at large. The ski’s MAP in 2014? $949. The price to the consumer, ergo the dealer, hasn’t changed meaningfully in more than 10 years. That same desire to avoid spooking the highly valued consumer is why subsidiaries and distributors are trying to hold prices down as much as possible, despite all the forces arrayed against them.

The strained pricing system is most likely going to burst at the next opportunity—namely, the preview shows next winter that bring suppliers and their customers together. Whatever elasticity in wholesale pricing remains after this year’s bloodbath will be expended. Prices will go up. One or two brands may seek differentiation by retaining dealer profitability at lower price points, but that tactic will likely only be available to a couple of manufacturers.

Proponents of the notion that high tariffs will drive manufacturers to relocate to the U.S. should consider the position American-based ski brands find themselves in today. These brands can opt to build their skis in other countries (e.g., J Skis, Liberty), or they can import essential materials like aluminum alloy from the EU.

Pete Wagner, who manufactures Wagner Custom Skis in Telluride, Colorado, points out that he can source wood, fiberglass, base and sidewall plastics in the United States, but depends on Europe for steel edges and aluminum alloy. That’s because the number of skis currently made in North America doesn’t justify custom runs of specialty metals by domestic mills. “Steel and aluminum now carry a 50 percent tariff,” Wagner notes.“Our prices may edge up 10 percent.”

Regardless of how the market-share skirmish in the American ski sector shakes out, nothing will stop prices from escalating, both in the season just beginning and the one peeking over the horizon. But in neither case are price hikes likely to seriously hurt either suppliers or retailers. For the current year, expect to see price increases at retail mostly in the $20 to $50 range; the anticipated boost in next year’s retail pricing will level off somewhere between 10 and 20 percent. That’s assuming tariffs on equipment originating in the EU hold at 15 percent, a level that both sides in this trade skirmish seem ready to live with.

But will China see a similar reprieve from the threat of 25 to 35 percent tariff surcharges, and, if not, what happens to brands that are locked into a Chinese relationship? Chinese interests already own a substantial stake in such venerable ski brands as Atomic, Salomon, K2 and Rossignol. Considering the ambitions of the Chinese ski market, perhaps these brands won’t continue to depend on sales to their traditional consumer bases in the U.S. and EU. Bear in mind that China is on pace to build out 40 ski resorts in the next 10 years.

While China will probably end up faring just fine despite the impending 35 percent tariff (and any additional tariffs on aluminum or steel components), some of the markets it serves are bound to be pummeled by some combination of scarcity and price increases. In the U.S., goggle makers may be able to scramble and create some product domestically, but right now it’s hard to see how the helmet market won’t be crippled. Every ski brand is going to have to continue to spend an uncomfortable amount of its scarce human capital to stabilize product development plans and reassure skittish markets that there’s no reason to slash orders.

What will it take for this whole, unproductive mess to resolve itself with minimum impact on today’s ski market? Snow. If it snows from coast to coast, $50 price increases won’t put a noticeable dent in skiing’s popularity. Throughout the history of lift-assisted skiing, the sport has been, for the most part, elitist. That’s never been more true than now, yet it’s nonetheless still possible to ski without emptying the family treasury. For the American ski market to get healthy, we need a broad base of active skiers from Maine to California, and that won’t happen without snow.

What will be the actual impact of the recent tariff morass on the ski market this year? Sales of Epic and Ikon passes would indicate that participation isn’t about to fall off. Skiers will pay a little more for their gear, but we’re talking a price hike that’s less than the cost of a proper ski tune. If there is snow, we will all show up to ski. 

Regular contributor Jackson Hogen wrote about the death of big-box ski shops in the July-August 2024 issue.