VF’s Quarterly Result; Why is it We Bother?

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We review VF’s results because they own brands we are interested in. Same reason we review Jarden’s, PPR’s and other companies. But we rarely get much information on those brands because they are part of a larger segment by which the corporations represents its business. And, in the case of VF, we get literally nothing on Reef because it’s so small that its contribution to the action sports and outdoor segment isn’t significant I guess.

This is, in part, the inevitable result of consolidation. But if we’re paying attention to these conglomerates, in spite of the lack of information on brands we’re interested in, there must be a reason.

It’s because for most brands in our industry, the focus is on youth culture or fashion or some other word as much or more than the core action sports market. That much larger target is where most of the customers are. We use terms like “consolidation” and “vertical integration” benignly, and it’s a little too easy to forget just how hard these trends make it for specialty shops, smaller companies, and brands that are strictly wholesale. I don’t say that critically of companies that are consolidating and integrating, but as a reminder to those of you who aren’t of what your competitive environment looks like.
 
Let’s get to the specifics of VF and then I’ll point you to something you might want to read.
 
Revenues for the quarter ended September 30 were $2.75 billion, up 23% from the same quarter last year. However, the acquisition of Timberland was completed during the quarter and it contributed $163.6 million, or 7%, of the increase to revenues. Direct to consumer and international grew 15% and 29% organically (excluding acquisitions) during the quarter. Including acquisitions, the numbers were 21% and 44%. A weaker U.S. dollar increased the quarter’s revenues by $56 million.
 
I guess what we’re most interested in is VF’s outdoor and action sports group that contributed, including Timberland, $1.437 million in revenue, up 37% from $1.045 billion in the prior year’s quarter. This is the segment that includes Vans and Reef, as well as The North Face and others. It’s 52% of VF’s revenues for the quarter. The next closest segment, of their six, is about half that. Profit from the action sports and outdoor segment before interest, taxes and common corporate expenses was $321 million, up from $248 million in the previous year’s quarter. That’s 65% of the quarter’s profit before the expenses I mentioned. No wonder VF likes action sports and outdoors.
 
Action sports and outdoor business in the Americas rose 21% in the quarter (13% excluding Timberland). Worldwide, The North Face and Vans grew 22% and 25% respectively. In Asia, the segment’s revenues were up 81% (50% excluding Timberland). “Direct-to-consumer revenues in this coalition [segment] rose 31% in the 2011 quarter (20% excluding Timberland), with increases of 29% and 18% in The North Face® and Vans® direct-to-consumer businesses, respectively. Direct-to-consumer revenue growth was driven by new store openings, comp store revenue growth and an expanding e-commerce business.”
 
The gross margin percentage fell from 46.5% to 45.3%. There was a “…1.8% net impact from higher product costs that were not fully offset by pricing increases. This decline was partially offset by a greater percentage of revenues coming from higher gross margin businesses, including the Outdoor & Action Sports, international, and direct-to-consumer businesses.” Not so different than a lot of other companies.
 
Having read that quote, anybody want to speculate on where VF if going to focus its attention?
 
Net income was $301 million, up from $243 million in the same quarter the previous year. Timberland contributed $8 million of the increase.
 
The balance sheet took a bit of a hit because VF borrowed money to pay for Timberland. The current ratio fell from 2.5 a year ago to 1.5. Debt to total capital was up from 20.1% to 40.1%. Short term borrowings rose from $49 million a year ago to $1.145 billion at the end of this quarter. They expect the short term borrowings to be repaid by year end. They also borrowed $900 million in longer term debt for the acquisition. $400 million matures in August of 2013. $500 million isn’t due until 2021.
 
Receivables grew 40% from $1.1 billion to $1.548 billion. But $315 million of that was the result of the Timberland acquisition. As you think about inventory levels for VF and other companies, remember that higher prices mean higher inventory even when the units don’t change. VF says 9% of its inventory growth was the result of higher prices.
 
One of the analysts in the conference call pointed out that Timberland did some of its own manufacturing, and asked if VF might see this as an opportunity to make some more of its other products as well. It’s something it sounds like they will look into, but it’s too soon after the deal closing for them to be specific was the response. 

As you have probably concluded for yourself, VF is doing just fine.  Rather than think up some clever closing paragraph, I thought I’d offer you a link to an article that Rob Valerio of business consultants CPO sent me on the expansion strategies of retail CEOs.  It doesn’t refer just to our industry, and VF is much more than a retailer.  Still, you’ll see certain continuity between the strategies retailers in general are using and what VF and others in our industry are doing.  As I said at the start of this article, independent retailers, small brands, and brands that are strictly wholesalers are being pressured by bigger, sophisticated companies.  You may not be able to do what VF does, but you can look at some of these strategies and pick a few places where you can perhaps do something new, different or better.   

 

What Will You Do When Your Greek Receivables are in Devalued Drachmas?

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There are lots of public company quarterly reports I should be writing about, but I am going to step off that track and think, for a bit, the unthinkable.

Or at least it was the unthinkable. But at this point the Eurozone seems to be moving towards two choices, either of which has huge implications for managing any international business.

Let’s review for a minute. What are the three things you can do to get rid of debt? You can pay it off. You can default (a “restructuring” is basically an agreed on default). And finally, at least if you’re a government, you can inflate it away by printing money.
 
The third approach has always been the favorite among governments, because it’s kind of sneaky and doesn’t require politicians to directly take anything away from anybody. It’s happened many times. But don’t take my word for it. Go and read This Time is Different; Eight Centuries of Financial Follies. The point, of the book, of course, is that it’s never different. It won’t be this time. I reviewed the book on my site and you can buy it here.
 
Next, let’s talk about Iceland. Iceland thought it had turned itself into a financial capital, and its banks borrowed lots and lots of money from various British and other European banks. They were, of course, heavily leveraged. So when the cash stopped flowing and they couldn’t renew any of those loans, everything went to hell in the proverbial hand basket. The British and other Europeans howled that Iceland’s government had to make good on their banks debt. Unlike the Irish government, Iceland said, “Uh, actually we don’t.” And they didn’t.
 
Their economy went south and their currency devalued dramatically. It was ugly. But with the competitive boost of a devalued currency, they’ve started growing again.
 
That’s how it’s supposed to work. But Greece, and Ireland, Italy, and Spain, can’t devalue their currencies because they are part of the Euro.
 
Next, let’s talk about the bond market. The bond market is the biggest, meanest, son of a bitch on the continent. It has decided that there’s more risk in these country’s debt, and has pushed their interest rates way up. Italy is up over 7% even with the European Central Bank buying Italian debt (increasing demand and theoretically driving the cost down). Inevitably, higher interest rates make the debt burden even higher and paying off the debt harder. Spain is around 7% as well.
 
So what is Greece, or Ireland or Italy, to do? Austerity! Fiscal Responsibility! Which might work if they could devalue their currency as it is working in Iceland. It’s painful, but it can work. But with this much debt, and no devaluation possible, austerity in the form of spending cuts and tax increases just reduces the economy’s growth, which reduces tax collections, requiring more austerity. It’s a pretty vicious cycle.
 
Here’s the bottom line. There’s too much debt to be paid off. Somebody is going to lose money. They’re just fighting over how much and who.
 
If you’re a debtor nation like the Southern Europeans, you like the inflation solution, because it effectively reduces your debt. If you’re a creditor national like Northern Europe and Germany, you aren’t so enthusiastic because you know inflation also reduces the value of assets. And the Germans, of course have an institutionalized fear of inflation from the hyperinflation of the Weimar Republic. There’s the story of the cup of coffee that cost more when you had to pay the bill then it cost when you ordered it.
 
Remember when Fed Chairman Ben Bernanke told us the subprime crisis would be contained? Then Lehman Brothers collapsed and it wasn’t. I don’t know what will happen in Europe, but it can happen just as dramatically and just as suddenly. Most people seem to think the European banks are a bigger mess than ours ever were. There are simply not two to six trillion Euros (estimates vary) available to bail everybody out (unless they just start printing those Euros) and if there were, it wouldn’t solve any of the competitive issues that lead to this mess.
 
Long term Greek government debt is priced to yield about 30% right now. I’m sure it’s obvious that they can’t pay that, or anywhere near it, and actually service their debt. Something is going to happen. I think it’s either going to be inflation, or one or more countries leaving the Eurozone and defaulting on their debt on the way.
 
In not one quarterly report or conference call I’ve read so far have I seen any discussion of the management of this possible risk. It feels like it’s too uncomfortable to consider. Maybe it’s just concern that talking about it might make it happen. Perception does matter.
 
I doubt any of our major industry players’ sales to Greece are make or break for it. Still, if you’re selling and holding receivables in Euros and have assets denominated in Euros there and Greece suddenly goes back to the Drachma, what exactly happens? Nobody knows. Well, we know the lawyers would make a lot of money.
 
I assume companies are trying to hedge their exposures (not just in Greece) but I’ll bet that’s getting really expensive. I might consider offering discounts for prepayments. I guess you could try and denominate your contracts in dollars, but that might not help. There’s no mechanism for a country to exit the Euro, so they’d be making it up as they go along.
 
I’m not projecting a breakup of the Eurozone, but the possibility of some countries leaving it is certainly higher than it used to be. Frankly, I think they’ll resort to the good old printing press. That’s what’s happened historically, and the powers that be are all issuing coordinated statements about how they will “manage” it; that is, not let inflation get out of control.
 
What am I asking you to do? As always, just to consider the possibility, it’s impact on your company, and your strategy to manage it.

 

 

Skullcandy’s Strong Quarter; It’s Amazing What an IPO Can Do for Your Balance Sheet

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My favorite footnote in Skullcandy’s 10Q for the quarter ended September 30 is footnote nine and specifically the table on long term debt (Yes, I know it’s kind of sad that I have favorite footnotes). It shows no long term debt at the quarter’s end compared to $73.4 million on December 31, 2010. They raised $77.5 million through the IPO, and you can see what they used it for. Equity is now $92 million compared to a deficit of $16 million a year ago. The current ratio improved slightly from 1.89 to 2.19. They’ve got $15 million in cash at the end of the quarter compared to $2.3 million a year ago. Their bank debt is up a bit from $11.2 million to $14.2 million. 

Sales rose 58% from $38.5 million to $60.6 million. But they said in the conference call that sales in the 3rd quarter last year were impacted by late deliveries, difficulties getting product made, and inventory shortages. They note as a result that “…our increased sales guidance implies second-half sales growth of 38%, this year, versus 29% last year.” International sales were up 75.9% to $14.6 million. They closed the acquisition of their European distributor on August 26th. Online sales were up 413% to $6.2 million. That growth includes $2.9 million of sales of Astro Gaming products which Skull acquired in May.

Skull notes that they “…rely on Target and Best Buy for a significant portion of our net sales.” Each accounted for more than 10% of sales in 2010. Best buy continues to account for more than 10% in the first three quarters of 2011. As I noted when I reviewed their initial public offering documents, the bet Skull is making is that they can be very widely distributed but still be cool and desirable to their target market.
 
The gross profit margin fell from 52% to 47.5% though gross profit rose from $20 million to $28.8 million. Like most companies, they are experiencing higher product prices in China and they rely on two manufacturers there for “substantially all” of their product line.
 
Selling, general and administrative expenses were up from $13.3 million to $20.6 million. As a percentage of sales, they declined slightly from 34.5% to 33.9%. There was an additional $1.3 million of marketing expenses during the quarter.   Interest expense to related parties was $2.77 million during the quarter. That’s gone with the IPO complete and will mean improved profitability in future quarters. Profit was $952,000 compared to a loss of $1.22 million in the same quarter last year.
 
I’ve laid out the numbers first so we could talk about Skull’s strategy and positioning a bit. Skull is the first mover in a market they identified. The brand reflects “…the collision of the music, fashion and action sports lifestyles.” They have stylized “…a previously commoditized product… The Skullcandy name and distinctive logo have rapidly become icons and contributed to our leading market position.”      
 
As you’ve probably noticed, many companies are jumping into the market Skull created. There are limited barriers to entry and, right now at least, not a lot of technological product differentiation. In those circumstances maintaining and improving its market position requires Skull to grow quickly and continue to spend freely on advertising and promotion because that’s what the product differentiation is based on. And they are.
 
But growing costs money. You need more people and more inventory and continued marketing. In the 10Q Skull notes that they “…typically receive the bulk of our orders from retailers about three weeks prior to the date the products are to be shipped and from distributors approximately six weeks prior to the date the products are to be shipped…Retailers regularly request reduced order lead-time, which puts pressure on our supply chain.”
 
It would really be interesting to know more about the order cycle so we had a better understanding of how much Skull has to build inventory with growth.
 
Skull’s management talked in the conference call about how they are addressing some of these competitive issues. They indicate they are transitioning to “…an in-house ODM model, where we originate and control more of the design and manufacturing process.” The goal is to help them create new, proprietary products. They’ve also hired a “very senior acoustics engineer” to work with the product development team. “Dual sourcing remains a key priority…” Approximately 10% of products were dual sourced at the end of the third quarter, and this is to increase over the next year.
 
Importantly, they refer to an increasing average selling price (ASP), though they don’t give any specifics. They say that was “…driven by growth in our own premium category along with mid-shift towards higher priced products across our entire line of headphones.” Domestically, their ASP was up double digits.   That’s great. When you spend a bunch of money on creating the brand, you’ve got to get higher product prices for the business model to make senses. That’s why you build a brand.
 
High end headphones feel a bit like a little luxury people can afford (and need) in a tough economy. Maybe that’s why there’s room to move up in price point. I really wish all the money from the public offering hadn’t gone right out the door to pay the investors. I’ll bet Skull could do even better things with some more working capital.                 

 

 

WeSC’s Annual Report; Numbers and Strategy

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I didn’t spot WeSC’s annual report until Shop-Eat-Surf did a story on it. Now, I’ve been through it. The Swedish approach is an interesting combination of a U.S. style annual report and our 10K SEC filings. I’ll start with a review of the numbers, but more interesting (I hope) will be a discussion of WeSC’s strategy and market position.

A Few Numbers

WeSC is a Swedish company, so their functional currency is the Krona. All numbers are in Swedish Krona unless I say otherwise. By way of reference, there were six Krona to the U.S. dollar at the end of the company’s April 30 fiscal year. A year earlier, it was 7.62.
 
WeSC’s revenues for the year ended April 30 were 408 million. At the end of fiscal year exchange rate, that’s about US$68 million, up 11.2% from 367 million the previous year. In constant currency, it grew by 20%. Gross profit margin was 45.9% down from 46.9% the previous year.
 
Pretax profit fell 28% from 56 million to 41 million. Net profit was down 40% from 48.8 million to 29.4 million. I should note that the income tax rate jumped from 13.1% to 27.7% and that pushed net income down more than you would have expected. Earnings per share fell from 6.6 to 3.98 Krona. The lower tax rate last year was due to booking a tax loss carry forward.   It was a one-time event (hopefully). 28% is a normal tax rate.
 
WeSC explains that “For the full-year 2010/2011 the dollar was an average of approximately 4.2 percent lower than in 2009/2010,” and “…the euro was an average of approximately 10.5 percent lower than in 2009/2010.”
 
“The lower dollar and euro exchange rates against the Swedish krona have had a positive effect on gross profit in the form of lower production expenses. At the same time the lower dollar and euro exchange rates against the Swedish krona have reduced revenue, because of which the total effect on gross profit was negative (the majority of purchases are in US dollar and the majority of sales are in euro).”
 
WeSC also notes that higher cotton and shipping prices had a negative impact, though they passed on some part of those increased costs as higher prices. 
 
WeSC’s lament about higher costs and exchange rates sounded an awfully lot like Billabong’s. At least WeSC didn’t have droughts and floods to worry about in their home market and isn’t as dependent there on owned retail as Billabong is. 
 
Only 18% of the company’s revenues are in the U.S. In U.S. dollars, it’s about $12.1 million at the April 30 exchange rate. Its next largest markets by revenue are Sweden, Germany, France and Italy with 16%, 10%, 9% and 9% of revenues respectively. The company reported it was in 2,410 retailers in 21 countries. 626 of those are in the U.S. The next largest is Italy with 320.
 
One of the things we’ve noticed in reviewing other company’s results is that they are focusing on growth outside of the U.S. due to better margins and growth opportunities. WeSC seems well positioned to take that approach as well. They’ve just started their program to enter China. U.S. sales for the April 30 year generated an operating loss of 2 million Krona.
 
57% of revenues come from distributors. 35% is through wholesale with the remaining 8% from direct retail sales. Like many other companies, WeSC is bringing its distribution in house as it grows. In the last fiscal year, it acquired its Danish distributor. Previously it had done the same in Germany and Austria. As of April 30, WeSC had 28 retail stores it calls concept stores. It owns eight of them directly. They plan to open more (don’t say how many) and I’m wondering how many you open before you’re seriously in the retail business and not just doing concept stores any more.
 
On the balance sheet, I noticed that inventory fell over the year from 28 million to 24.5 million. That’s interesting with the increase in sales and the acquisition of one distributor, which normally causes inventory to increase. I imagine some of it has to do with the strengthening of the Krona, which would reduce the cost of product bought in other currencies when translated back into Krona. It probably also reflects the brand exclusivity the company wants and an effort to make the distributors keep the inventory.
 
Accounts receivable rose 46% from 71.4 million to 104 million. Some or that would occur naturally with sales growth, but the strengthening of the Krona would reduce the value of receivables in other currencies, so I’m unclear as to the reason for the increase. WeSC notes the company has 57 million in overdue receivables (compared to 28 million at the end of the prior year). They have those “…without impairment losses being considered necessary.” Of this 56 million, 7.8 million is more than 91 days overdue and another 7.4 million is 61 to 90 days overdue.
 
The company’s “provisions for impaired accounts receivable at year-end” has fallen from 3.3 million to 2.6 million even as total receivables and total overdue receivables have grown significantly. I’ve seen language like this before (I think in Billabong’s financials) and it just doesn’t make sense to me that you can have a lower provision with that kind of increase in receivables. You can’t conclude that there is not an increased receivables risk, even if you assume you aren’t going to have to collect your Greek receivables in Drachmas.
 
The footnote goes on to explain that the company has 14 customers who owe the company more than a million Krona and together make up 80% of receivables. Five of those owe WeSC more than five million Krona each and account for 56% of receivable. I imagine some of those are independent distributors.
 
WeSC has no long term debt. Current liabilities rose from 52.9 million to 68.5 million as a result of a 22.3 million liabilities to credit institutions. This represents money they’ve borrowed that’s secured by receivables. The current ratio has fallen from 3.1 to 2.4, but is still more than adequate. Total debt to equity is 0.57, up from .40 a year at the end of the previous fiscal year.
 
Strategy and Some Interesting Comparisons
 
WeSC talks about its strategy as being more penetration of existing markets, entering new markets, launching new product groups, and opening more retail stores. That, of course, is more or less the same strategy that a whole bunch of other brands have. Why might WeSC succeed at it?
 
In a word, “street fashion.” It now seems like an obvious thing, but it was some time before 2000 when CEO Greger Hagelin thought of it. Or at least I think he thought of it. Reminds me of Skullcandy’s Rick Alden wandering around one day some years ago and thinking, “cool, stylish, earphones for the exploding portable electronics market.” Both seem obvious now, and I’m sure I’m not the only one who’s said, “Why didn’t I think of that?”
 
If you’re a street brand or an action sports brand, it’s hard to become a fashion brand. Ask Burton. Ask Volcom who, in my opinion, sold to PPR at least partly because they so solidly owned their own market niche that they couldn’t break out of it and continue growing without help from a fashion player.
 
But if you’re starting from scratch, selling “…streetwear with style, a cross between traditional streetwear and contemporary fashion…,” maybe you can have a foot in both markets. “Because of WeSC’s unique identify, other brands carried by retailers are seen more as complements than direct competitors.”
 
That might be a bit arrogant. But if it’s true, it’s pretty damned powerful.
 
The result, CEO Hagelin says, is that “We are one of the few brands that can sell our products in everything from action sports stores to fashion boutiques, to some of the world’s best department stores…” And they are able to “…broaden our distribution with watering down the brand…,” he goes on to say.
 
Street fashion does fit in a lot of places, and allows for product extensions, because of the brand’s positioning, that an action sports or street wear brand would have a hard time accomplishing. WeSC’s foray into high end headphones and luxury sneakers are two examples of such extensions. The company tries not to compete on price.
 
But I have to note that public companies pressured to grow seem to have an almost innate ability to screw up distribution eventually. It’s uncanny.
 
CEO Hagelin’s letter to shareholders also notes that, “The basis for our success, as well as our biggest challenge, is to continue to enlist skilled employees and outstanding WeActivists, who will help us strengthen and spread our brand and corporate culture.”
WeActivists are “…informal brand ambassadors.” They “… are strong-minded, successful individuals who are dedicated to their professions and to WeSC. WeActivists range from artists skaters and snowboarders to photographers, musicians, DJ’s and others who are extremely good at what they do, whether famous or totally unknown. WeActivists share a “street mentality,” and each one serves as an individual ambassador for their subculture.”
 
That sounds a lot like what Skullcandy does with its own extensive group of informal brand ambassadors. The focus on employees who can spread the brand and strengthen the culture sounds like Zumiez’s outstanding employee development program. There is no reason to reinvent the wheel.
 
The one thing I didn’t see in the annual report was a discussion of the competition. I hope that’s just an oversight. I’m intrigued as I think about who their competitors are, and I can’t really name them. Obviously, it’s not that they don’t have any. But if my observation that there are some barriers to being either street or fashion and moving into street fashion is accurate, then maybe WeSC has a head start.
 
But first movers, if that’s what WeSC is, aren’t always the ones who ultimately succeed in a market. It might be that WeSC is just now getting big enough to be noticed by the big fashion players, and that could force the company to pay more attention to competition. I have no knowledge of this, but perhaps the company’s longer term strategy is to get purchased by one of the very large players. I can imagine that WeSC’s positioning might attract some big multiples if those potential buyers consider it valid.   

 

 

Jarden’s September 30 Quarter And the K2 Rolling Stones’ Limited Edition Ski Collection

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As you know, Jarden is a big, multi brand company that did $6 billion in its last complete year. They’ve got over 100 brands including Crock Pot, First Alert, Coleman, and Mr. Coffee. They also own K2, Ride, 5150, Planet Earth, and Volkl and that’s pretty much why we are interested in the company, though I think I’ve got a toaster oven one of their brands made.

The brands we care about are part of their Outdoor Solutions segment that did $707 million during the quarter (the whole company did $1.8 billion) and aren’t broken out from the rest of the brands in that segment. So we’re reduced to scouring footnotes and the conference call to see if we can find anything interesting.

Here’s the link to the 10Q. I’m not going to do my standard analysis of the income statement and balance sheet because the company’s pretty solid and I can’t really pull out any specifics that are relevant to action sports and youth culture.
 
Hiding in plain sight is the fact that Jarden is another big corporation that’s in our space and has been for some years now. Guess we should be used to it. That size and the extent of their operations gives them a perspective on the on the economy and business conditions that can highlights some things we are also thinking about.
 
One of those is China. Jarden management noted in the conference call that they expect Chinese wages and benefits will “…continue to rise by 15% to 20% annually as the Chinese economy becomes more consumer oriented and that the long-term trend in shipping and transportation costs will continue upwards.” As a result, they are bringing certain products back to the U.S. for manufacture. Time Magazine wrote about it as an example of an expanding trend. No snowboards or skis yet, according to the article.
 
A second is their focus on “achieving greater efficiencies from working capital.” That’s the stuff we’ve all been working on since the economy got tough; controlling inventories, being careful with credit, watching expenses. You know- all the operating stuff you do to try and bring a few more bucks to the bottom line when sales growth is a bit harder to come by.
 
With regards to the winter sports business, we did get a few pieces of information. They note that K2, Volkl and Marker have had strong early orders, especially in Europe. They think retailers are trying to replenish record low inventory positions.
 
There’s also a note about there being a Seattle K2 concept store that’s open on a seasonal basis. I haven’t seen it, but will have to track it down. Jarden has Rawlings and Coleman outlet stores. They say they are interested in doing more retail, but don’t offer any specifics.
 
I also found out that Jarden has an investment in Rossignol (size not specified) though they aren’t involved in running it.
 
Finally there are, in fact, going to be Rolling Stone limited edition skis from K2. I really don’t know whether or not I like this idea. I’d love to talk to the marketing guys about their rationale. I was relieved to see that it’s apparently not on any snowboards. Maybe it was the threat of putting Rolling Stones graphics on Ride that made Robert Marcovitch leave town.
 
As you know, Robert was the CEO of Ride and stayed with the company when it was acquired by K2 and when K2 was acquired by Jarden. He was running (very successfully I heard) the entire Jarden winter sports business until a bit more than two months ago, when he was promoted to CEO of Coleman and sent to their headquarter in Wichita, Kansas from Seattle.
 
Now the plot thickens. We learn in the conference call that, “…Robert and his senior team have been looking at Coleman on a global basis, looking at where our customers are, and how we need to be able to respond to a growing global presence…”
 
Out of this review came a decision for Coleman to put a facility in Denver“…that puts us closer to an international airport, puts us closer to people to work in the outdoor industries in our core consumer group and we think it’s a move that is going to kind of reinvigorate Coleman and put us on its next leg of growth over the next 10 years.”
 
Nice work Robert!! I don’t actually know any of this, but it just feels like he took the job, got to Wichita, and decided he needed to be back near the mountains. I’d love to see the Power Point he used to convince senior management.
 
On a serious note, I suspect that part of his new job is to get Coleman out of Wichita figuratively as well as, I guess, literally. This is a well-known brand that I think of as reliable, workmanlike, and venerable. In some ways it feels like a utility; it always works and it’s always there when you need it, but it’s definitely not cool. Robert has the background to make it cool and expand its market reach and I’ll bet that’s part of the plan. I think there’s a lot of potential there.
 
Should be fun to watch.