Retailers Hit the Trails

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Have you been mountain climbing in the Himalayas lately? That's OK. Me neither. Few of us are hardcore climbers, but more and more are heading outdoors for various more amateur activities. A recent press release from the Outdoor Industry Association suggests that we are buying outdoor apparel like it's going out of style.

According to the study, from August 2004 to January 2005 revenues from equipment and equipment accessories declined against the same period a year ago, but outdoor footwear continued to see robust strength, with sales up 15%. Sandal sales were highlighted as a particular source of strength in the category.

This should come as no surprise to investors who have tracked the progress of companies such as Wolverine World Wide (NYSE: WWW) with its Merrell brand and Motley Fool Hidden Gems newsletter selection DeckersOutdoor (Nasdaq: DECK) with Teva.

That being said, as we've seen from the recent slashing to Deckers' stock, just because sandals are popular doesn't mean sales will be smooth sailing. It seems like nearly every footwear company is making sandals, with Chaco and Keen leading the charge for outdoor enthusiasts.

Although footwear sales have been strong, apparel dominates overall, accounting for 50% of all outdoor revenues. This comes as old news to those who have followed such highfliers as Columbia Sportswear (Nasdaq: COLM) and VF (NYSE: VFC) with its outdoor flagship brand The North Face.

There's no question the great outdoors are hot, and consumers are sporting the coolest threads when hitting the trails. If there's a concern for investors looking at these companies, it's the heavy competition.

In addition to the above-mentioned footwear brands, companies such as Montrail, Vasque, Salomon, and Asolo make this market a tough one to gain a foothold in. Likewise, popular apparel retailers Arc'teryx, Marmot, Cloudveil, Patagonia, and many more are challenging Columbia and The North Face at every turn.

For more summer reading on these retailers, be sure to pack these for your next camping trip:

• Columbia's a Good Sport
• VF's Acquisitions a Good Fit
• Deckers' Brand New CEO
• Wolverine Claws Its Way to Growth

Motley Fool Co-Founder Tom Gardner has crushed the market in his Motley Fool Hidden Gems newsletter -- by more than 20 percentage points since inception. Click here for a free 30-day trial .

Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.