6.17.2010

Tommy Knoll & Earthwerx: Gentlemen, start your checkbooks

Last month, the US division of the niche climbing brand CAMP was acquired by their Italian parent company. As a result of the sale, the guy who had been running the show at CAMP ... Tommy Knoll ... not only has quite a bit of free time on his hands, he also has some "resources" to apply to a new venture. According to an exclusive interview in SNEWS, his plan is to start a group focused on acquiring small, soulful outdoor industry brands -- and to help them grow without getting so big that they forget their roots. Known as Earthwerx, the group will begin looking for those brands asap.

* You say you're looking to acquire cool, soulful outdoor brands between $2 million and $10 million in size, How many of those companies are out there?

Quite a few and increasing. Next time you're at Outdoor Retailer take a stroll off the main floor and you will find quite a few smaller, niche specific companies offering really interesting and unique products and services.

* And once they're in the Earthwerx group, what will happen to them then?

That's the secret sauce... the main thrust of our work will be to ensure these companies not only survive in a tough marketplace, but thrive.

* Did you ever consider spending your chunk of the sale on reinvigorating "The Piton"?

In all seriousness, there was a real demand for the, ah, news, The Piton was providing. Day jobs and other commitments took over and ultimately won.

* What's the difference between Earthwerx and a private equity firm looking to acquire outdoor brands?

What we have found is that although the Private Equity folks know how to manage and own businesses - we have found they are lacking in specific outdoor industry experience. This is where our team bridges the gap between capital and industry experience.

* When you were at CAMP USA, did you ever try on one of those randonee racing suits?

No comment.

* I feel like there are two threads here .... it's a "passion play", in that you're making a serious commitment of cash and personal time to a perennially low-profit outdoor market; but it's also a "money play," in that you're trying to turn a sizable profit and help others do the same. Can you really have it both ways?

We think so. There are many sectors in the marketplace where passion and innovation intersect to produce success - that's what we're looking for in this strategy. In our assessment, there isn't a shortage of passion and innovation in the outdoor marketplace but as you mention there is a shortage of profitability. We're looking to combine innovation and passion with the end result being success.

* Part of your success at CAMP USA was establishing a solid "direct-to-consumer" business .... aka, selling online without a retailer as a middle man .... while still maintaining an authentic "core" presence in small specialty shops. Is this easier than it sounds?

The marketplace has changed. Retailers are more accepting of brands selling direct because they see the value of greater brand presence - there is proof that a manufacturers brand presence equates to more traffic for them. It appears other manufacturers are also having this cross-over success. Ten, or even five years ago specialty retailers were resistant to manufacturers who were selling direct. We waited until the market was ready for and more accepting of a direct to consumer play and only then did we roll out. Direct to consumer models are commonplace now and if structured properly can be mutually beneficial.

* The more you sell online, the less people have a chance to touch and feel your product. But the more you sell in shops, the less profit a company makes. So, iIn figuring out how much to sell online and how much to sell in shops, what's the right balance?

I don't think one is mutually exclusive to the other - both have a role and a specific purpose - if planned properly. Specialty shops are the lifeblood of most manufacturers and brands - this is where community gathers, the product is on display, stories are told and transactions take place. From what I see - the moment that specialty shops stop building community is the same moment they begin their irrelevancy. With that being said, specialty retailers are not the only game around. Certain, particular consumers are only interested in buying direct for a variety of reasons and this will only continue. If the ownership and leadership of both specialty retailers and manufacturer brands work in concert with one another to create an optimum buying environment that includes elements such as holding price and preferred delivery then both models can work. There are plenty of case studies that prove this.

* I heard that you actually made some real money from the sale of CAMP USA this spring. How come you didn't take more time off?

You must be getting your news from The Piton!

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