Thursday, January 29, 2015

Ski Republic is no more, but the revolution lives on

I'm sitting here waiting for the long-promised snow storm to hit us; we have been promised 50cm in the next 24  hours and the possibility of a 'semaine de blanc' after that. The last time we have a really big downfall was the 27th December (although there's been a fair amount of snow but in small quantities), and the chaos that ensued was well documented by the British and French press. Perhaps it's only going to snow seriously on the 27th of the month this season! In any case, we could really do with it to get Les Arcs up tip-top condition for the school holiday, which in France start in two weeks time.

In today's Dauphiné I read that the beleaguered 'low-cost' ski hire business Ski Republic has finally be sold off to Danisports (already owners of the  Precision Ski franchises and brands). Ski Republic was a brilliant idea, stared by Lionel Favre in 2006. Impressed by business approach of Stelios Haji-Ioannou, the founder of EasyJet, Favre realised that the complacent, overpriced and frequently monopolistic hire shops to be found in every european ski resort could produce even more profit if their costs were carefully controlled and they were more 'marketing driven'.

 The main idea was stunningly simple: instead of holding large stocks of equipment in expensive resort retail premises the skis, board and boots etc. were warehoused in a cheap industrial unit in the valley (in fact just outside Bourg St Maurice). Servicing and preparation of the equipment was thus done centrally, making the best use of expensive machines and technicians, and the materiel delivered to tiny retail shops (hardly more than kiosks) by garishly-coloured eye-catching vans. In addition all the marketing and order-taking was done via a well-designed website. Unlike 'traditional' ski hire shops with their extortionate mark-ups, incomprehensible and randomly-applied tarifs you knew how much you were going to pay as you paid it 'up-front'. This was good for Ski Republic's cashflow, enabling them to keep their prices low and to offer their famous 'hire one get one free' deal.

Many traditional ski shops were owned by local families whose community standing pre-dated the coming of industrialised skiing in the 1960s and 70s, and they were incensed with the threat to their perceived right to exploit and abuse tourists to the full. Consequently several Ski Republic shops were set alight, vandalised or had their door locks super-glued, tyres were slashed and SR staff threatened and abused.  But the newcomer really did cause a revolution in ski hire - eventually prices were forced down generally, price lists simplified and large discounts promised to skiers who pre-booked their equipment on the shops (often hastily and badly designed) websites. Transparency and competition led to a better and cheaper service for everyone, but also led to the domination of a few large franchises such as InterSport, Precision Ski and SkiSet. Sadly, some quality independent operations like Twinner Sports disappeared  completely.

But it all went badly wrong for Ski Republic a couple of years later. Despite quickly capturing an impressive share of the market with 150,000 pairs of skis and a turnover of nearly 5 million euros it didn't make a profit in its first two years of operation. With the 2008 'credit-crunch' banks panicked over backing even slightly unconventional businesses, and SR suddenly found its line of credit broken and unable to pay its bills. The french commercial legal processes of 'cessation des paiments' and 'redressment judiciare' ensued (designed to give a struggling business protection from its creditors while it tries to pull itself together) and M. Favre was forced to liquidate all his other assets (which included the Precison Ski brand) to keep the business going.  Since then it's struggled on, with various owners and backers invloved. Finally the Tribunal de Commerce at Chambéry pulled the plug, forcing the sale and/or closure of the remanents of Ski Republic.

Saulire with La Grand Casse (3855m)
A personal ski-hire anecdote: I remember how, as a relatively inexperienced skier, I had hired a pair of skis at Courchevel 1650. After a day or so I realised that the bindings were wrongly adjusted for my weight and ability (the skis kept coming off) and the braking mechanism on one of them was faulty and never descended to stop the ski sliding away when the binding was open.   
Predictably, as I was tackling the difficult, bumpy 'M' black piste below La Saulire, the ski came of on a bump and slid away, under the netting at the side of piste and fell 100m or so into the ravine below. I had to complete the remainder of  'M' on one ski and my backside, and take a series of lifts in the wrong direction to get back to the ski hire shop (closed of course, at 12). When it finally opened at 4.30pm  I explained my predicament, tired and annoyed at having lost half a day on the mountain.  The response: 'You lost ze ski? So you have to go and find it!' After pointing out the impossibility of this  I was told 'OK, so you 've to pay for a new PAIR of skis'. 
Too exhausted to argue I returned the next day to be told by the manager, 'Oh it's no problem, we give you another pair. I expect the pisteurs will find it in the Spring...'  I was relieved, but also confused.

I'm pretty sure the new owner Danisports will soon abandon the Ski Republic brand and the business model in order to build its other interests and improve its margins. Although the name may soon be forgotten, Ski Republic was responsible for revolutionising and important facet of the modern ski industry, formerly famed for its inefficiency, lack of customer service and ludicrous over-pricing.  I wonder what they's do with all those pink and yellow caravans?

No comments:

Post a Comment