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It's only a slight derailment. A friend in industry (bike and skis) once told me that almost all Canadian ski hills (and especially RCR) should be viewed as real estate companies that happen to ski... I'm honestly amazed we have as many bike parks as we do.....
Really interesting podcast about/with Rose bikes from Escape Collective; I'd heard of the brand but never knew much about them.
https://share.transistor.fm/s/8910c296
Some key stats:
Been around for 107 years
Have never taken a loss (like, what!?)
~€205M annual revenue
~650 employees
"Family owned, management run"
Managed to pull off 2% growth in 2025 AND migrate to an ERP at the same time (would love a deeper dive on that alone!)
Actually the bike park is often viewed as a reason to buy/rent real estate. Lot easier to keep some folk in the hotel if there is shit to do in the summer and a lot more reasonable for someone to buy a ridiculously expensive condo/home with massive hoa fees if they want to use it year round or can air bnb/split with a friend if they are winter only.
Whistler bars and restaurants make more money in summer compared to winter.
Good question and as always, thanks to everyone who reads anything I write!
The next 18-24 months depend almost entirely on two things Vail cannot control. How much it snows and how the consumer feels. Everything else is downstream of those two variables. But here's how I think the scenarios play out:
The dividend gets cut or eliminated entirely. This might be the single most important near-term decision.
I don't expect you to notice any difference at the bike park this summer or on the mountain next winter. Where you will see a bad year is in the stuff that doesn't show up on a press release: deferred trail builds, one fewer lift spinning on slow days, fewer early and late season operating days, slower terrain openings after storms etc
Asset sales are more likely than anyone is discussing. Vail doesn't have to sell the whole company to fix the balance sheet.
The debt covenants are the thing nobody is talking about. I haven't dug deep enough into the credit agreement to know exactly where the covenant thresholds sit, and that's a gap in my analysis I want to flag honestly. But if they trip a covenant, the conversation changes.
Epic Pass pricing is a massive lever and every option is bad. Do they raise prices to offset the bad year (probably nope)? Do they discount to reverse the first-ever unit decline (eeek)? Do they hold flat?
Late Apex doesn't go away. They (activist shareholder) got one of three asks. If the next two quarters are ugly, expect a round two with more teeth
On Katz specifically. I am not betting on him as the long-term CEO of this company. My guess is he stabilizes (even at low levels), buys time, and steps aside within 18-24 months, either because the board loses patience or because he realizes the job isn't fixable on the timeline they need.
A take-private is possible but the price tag is steep. Enterprise value north of $5 billion is a big check. But there is record dry powder in the PE space, and you could make the argument that you'd unlock more value by taking it private, selling non-core assets, cutting the dividend, and running the 10 best mountains on a 20-year time horizon without quarterly earnings pressure.
The macro overlay matters more than people think. Skiing is pure discretionary spend. If the consumer softens through 2026-27, pass sales get hit by two forces simultaneously: bad snow in fresh memory and tighter wallets. That's the scenario where a 10%+ pass unit decline becomes realistic, and that's when the structural problems I wrote about in the piece go from slow-moving to urgent.
Also, this is worth the read for anyone interested in this stuff. Coop did a great job in putting this together, highlighting a number of points I missed. https://www.coopermarketing.org/coops-corner/the-gravity-problem?fbclid…
But yeah, another 200" winter and things get awfully tough out there in the Vail offices...
selling additional seats on the patio is lucrative? who would have thought!
Slight continue to derail... I just moved to town and over the last couple of months it's been interesting to learn the local views and issues on RMR is far more interesting than expected. Also, it is for sure independently owned which seems to be a rarity for a spot that large any more. The bump in the season pass for next year seems a bit wild considering there's a lack of expansion of the hill itself, just the resort Hotel capacity and that just clogs things up. It seems like they're hoping to fundraise with lift tickets to build the village instead.
Lake Louise for a flip, which would have an unreal bike park down both side if parks would let them build one... Is building their lifts to hope the huge upcoming terrain expansion draws people in. They actually almost have the opposite problem with too small a village because if the national park and huge terrain capacity that only seems to clog up on the front lifts for the casual skiers doing it to say they skied there. If you're on the back side it's all locals, serious skiers and the lift lines are usually non existent unlike stoke chair after 10 on the weekend.
Here's hoping the trail crew does what they can and they try to make up for the bad snow season by pushing a good bike season.
Kicking horse had entered the chat.
No ski resorts do their build out plan though. This is nothing new. Lake Louise is the only one.
As for future proofing for weather events, Revy might be worse off than most big resorts in BC/western Alberta. It’s actually quite low elevation and has always struggled with warm weather. Yes the top 300m might be good but that’s not good enough for a resort and the build out potential is limited up there.
Exactly. My wife and I were just discussing this topic this morning. There’s no way that a lift acccessed bike park (at least the ones I’m familiar with in the US) is making a profit off lift tickets and rentals, especially compared to winter lift numbers. A single green run probably holds as many skiers on it at any given time as the busiest day mountain totals at a park like Angelfire. What the bike park does do, thought, is provide another summer attraction to draw families and people to the area and get them renting houses and condos, eating at the restaurants, etc…. That’s where I suspect there might be actual money in a park like Angelfire.
And yet Highland is going strong.
This definitely makes sense. Look at Finale - the region sees the economic uplift from rentals, restaurants, hotels, bars, not the trails, which are free to ride. They've done an awesome job of creating a "resort brand" so strong that visitors can but the resort card to get a discount in participating venues and a portion goes back to the trailbuilders. There's definitely a well proven business model if US ski resorts were to replicate it.
I still think most bike parks aren’t total loss leaders. Maybe a few are truly operated at a loss but i imagine that has mostly had to do with overpaying for initial trail builds which is not much an issue for long established parks like angel fire. And quite a few are probably quite profitable. And an inverse way a place like angel fire is probably more profitable at the bike park than somewhere lesser known. Many of these places are spinning a lift anyways. Many have a very small trail crew that does quite a bit of off the clock work.
It’s just effort for a lot of revenue and minimal profits is just not necessarily in the prerogative for many ski hill owners. Especially if they don’t have a lot of skin in the real estate game.
Do you think that this could help the bike parks in a round about way? Bad snow year can mean earlier bike park openings and people might be willing to go out to the park and spend more since they weren't able to spend as much skiing in the winter.
Than you Jeff. And the Cooper link was interesting too.
Here, this winter, we have seen so many Americans with these mega passes. I didn't realise how bad a situation the evil Vail was in.
Does Diamondback bikes exist anymore? I know they dropped Seth for financial reasons, and Eric Porter is now on Canyon. Their website still exists but every bike is out of stock, and they haven't released (no pun intended) a new bike in years.
in tech rumors someone noted arcteryx joined the MTB world. on their site pants are $280, shorts $180, jacket $450 USD. to echo the statement in the tech rumors post, "why does MTB need outrageously overpriced clothing option?" for you econ peeps, how does this work for a brand like that? does anyone ACTUALLY pay full retail for gear that expensive? does it cost arc $18 to make shorts they can sell for 10x, so why not try? will this be talked about in 2 years as a mega fail?
https://arcteryx.com/us/en/c/mountain-bike/wid-6j83rq6l?intcmp=home_t2_c_mountain-bike_wid-6j83rq6l
On the exact same theme I saw on pink bike that ortovox are also entering the market... And that seems even more of a stretch than Arctetyx unless the lead times are so long this is still post COVID hangovers....
worked at Arc'teryx for 17 years (and then onto 7mesh for 6) and can say that it doesn't cost $18 to make the shorts. Their margins aren't much different then any other technical apparel brand so not 10x.
At least this time they've actually made product. Back in the day they brought on Richie Schley as an ambassador to help with an mtb program without allocating ant design resources etc and killed the program before getting started.
I saw in an industry group I'm in on FB that their parent company has either closed or is closing soon.. Bummer to see brands like Diamondback and Redline go away, but they have seem to have been lacking direction for years..
I feel like at some point they had announced they were pausing during the first year of the post COVID slow down and sold off their stock but said they'd be back when market conditions improved. They had just been bought in 22 by a new parent company and it sounds like they shut it down for the time being before some new models they were working on went into production as they had just started to be rebuilt by the new parent company.
While I'm by no means as knowledgeable as an industry vet like @BGoldstone, I've spent real time in the technical outerwear manufacturing/cost rabbit hole for my own reasons (explored a D2C snowmobile outerwear idea and even had prototypes made). There's a huge range of production costs depending on where you manufacture, how you manufacture, and what materials you use. Gross margin on this product family (ex shorts; ghastly price there) isn't 10x, especially after you layer in tariffs, dealer costs, and the inevitable write-off of dead inventory (weird sizes, stuff that didn't sell). But it still looks very healthy compared to the rest of the space.
Arc'teryx is firmly planted on the premium end of the barbell. No matter what something costs to manufacture, they're going to price it high and protect that pricing better than most brands (my experience, anyway). The real question is whether there are enough buyers in the top 10% of the demographic to justify this launch, especially when they're already competing against other premium outdoor brands like Patagonia offering something similar at a lower price point. My answer is probably not. But I'd bet breaking even on something like this is easier than we think for a company like Arc'teryx, so net risk is pretty low. Its a sidequest for a brand this big.
I guess it comes down to how is new product vs existing products being pushed towards a new audience?
Given the discussion on ski resorts and the bummer season most have had, and now the chat of high end outdoor clothing brands entering the MTB sphere, is it too much of an assumption to think the decline of winter snowpack due to global warming is one of the causes of these apparel businesses to pivot to other outdoor pursuits?
thx @BGoldstone and @jeff.brines for the intel on what margins may look like. while i didn't really think they'd be 10x, at $450 for a jacket, i just assume they'd still be pretty darn high.
Arc has done these types of project before; capsules that reach a new or niche audience. Often they are there to capitalize on emerging markets or test existing markets they don't participate in. I know quite a few of the Arc design and PLM staff and the drivers were that the team believed in the program, so the product is designed to a very high level, and that there was enough interest to do some relatively small production runs without too much exposure.
I've always viewed the niche offerings by these premium brands as essential marketing to continue selling the jackets to normal people that make up 80% of their revenue.
North Face still manufacture elite level gear for Antarctica (it's what my friend wears when he's deployed on the RSVP Nuyina) but it's brand awareness so they can sell thousands of jackets to people walking to a cafe. If it's a loss leader, so be it. As long as the company makes profit overall.
As a former rep for one larger brands in the mtb space, outerwear over $225 CAD, shorts over $120 CAD were difficult to get any buy in from most shops. Top end styles bought by the larger shops often ended up on the markdown rack. Seeing these premium brands enter the market gives me the cold sweats.
My time would have been pre E-bike boom, so not sure if that’s had any impact on premium pieces but placement itself was difficult.
Arc will focus on selling in their own brand stores and online, which will be a challenge in itself.
Fair point, I guess I was trying to illustrate what the market for high end bike softgoods was. I think the retailers are a great indicator of where the market is or in my case was… Selling high end softgoods on features and benefits was a tough proposition, so many competing brands have a full line softgoods and they are all sourcing premium fabric, engineering, construction etc. Arc has a ton of brand loyalty which is a definite advantage, the image value of a product is real…. don’t get me wrong I wish them well, I love their products.
As long as they are going into it anticipating relatively low volume and to sell to their fans/employees who mtb rather than try to market against Fox/tld/pearl/etc they’ll do just fine. I’m sure they are well aware your average mtber isn’t going to pay those prices to wear their name. But I’m sure they are also aware they have plenty of people who are willing to pay those prices whether they are decking themselves out for their first ride or are going to wear it twice a week for a few years riding.
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