Altamont Capital Partners Acquires Fox Head

You may recall that back in September this article told us that Fox Head was for sale. Fox, as you know, sells action sports and motocross apparel and accessories. You probably also recall that former DC Shoes Global President Nick Adcock, who was on the board of directors at Fox, took over as CEO on February 18th, when he replaced founder Geoff Fox’s son Pete. According to the article, the company has revenues of $230 to $240 million but is not profitable.

Now, though we have no details, we learn that it’s been acquired by Altamont Capital Partners. This is interesting on a couple of levels.

First, Altamont now owns or at least has investments in Brixton, Dakine, Fox Head, HUF and Mervin Manufacturing. That is quite a gaggle of action sports/outdoor/street wear/fashion businesses. Are these just opportunistic buys or is there a plan here? That is, will each continue to run independently, or is there enough overlap in markets and manufacturing to justify some coordination? Maybe Altamont is looking to build the next VF. I hasten to add that’s complete speculation on my part. Still, it does feel like there’s been a recent focus on this market by Altamont.

Second, we know that at some point (I can’t find out when) Fox founder Geoff Fox made his son Pete CEO. We further know that on February 18, 2014, Pete Fox resigned and Nick Adcock became CEO. That must have been a hard conversation for Geoff Fox to have with his son, but he gets respect for doing it.

Seven months later, or maybe sooner for all we know, the company is for sale and it’s reported that it’s not profitable. Now the sale to Altamont has closed, or is about to.

Shop-Eat Surf reported that Fox “CFO Bill Bussiere has been named CFO for Billabong Americas, according to Billabong CEO Neil Fiske.” They also report that Nick Adcock is departing, but I don’t officially know that. It will be particularly interesting to see who the new CEO is.

Transworld Motocross said that Pete Fox was “…likely returning to head the brand.” We’ll see. As CEO, he has some responsibility for the company experiencing losses that apparently required its sale (regardless of whether it’s his “fault” or not). One wonders if Altamont will want him as CEO.

I’ve done some turnaround work with family owned and run businesses. My drop and cover reflex is kicking in on this one. I’d be intrigued to know who owned how much of the stock and when Geoff Fox decided selling made sense. And if I could get a peek at the balance sheet, I’d die a happy man.

Oh well, probably the best I can hope for is to corner one of the principals in a bar at a trade show. I’ll buy.

 

14 replies
  1. actionsportsind
    actionsportsind says:

    CFO and CEO leaving, the Day it’s announced Pete Fox is returning as co-owner? Sounds like they are running for the hills from impending doom, OR, they were never a right fit for the brand and knew Pete would sh1tcan them? I also thought altamont is building a mini VF sort of deal. Might be worth noting, Geoff Fox brother, BOB FOX, has a suspension brand, they were acquired by compass holdings, then sold off, now private and recently purchased some bicycle industry brands (Easton/RaceFace). Foxhead and Fox Tail shake ups!

    • jeff
      jeff says:

      Howdy actionsportsind,
      I’m aware that Bob Fox has a suspension brand. We’ll see. I have no information on what plans Altamont might have. The question I still have is why Pete left as CEO in the first place. Nick was one board member. Bill wasn’t there. I think there’s more to this soap opera then we know yet.

      thanks for the comment,
      J.

      • actionsportsind
        actionsportsind says:

        Word on the orange county streets was that the old man didn’t like where the son was taking the brand and he was voted out by the board in Feb, placing Nick as CEO, bit of a power struggle happened, and then word came that the dad was over it, placing the brand up for sale….but the son wanted it badly, for better or worse-he loves that brand more than life itself it appears.

        • jeff
          jeff says:

          Hi actionsportsind,

          Thanks for passing that on. I’ve heard some rumblings too, but don’t have any actual information so don’t know if the word on the street is right or not. What you’ve described seems to fit the few facts we have, but there’s always stuff flying around when a deal like this happens. I try to be pretty cautious in not validating a rumor until I know it’s a fact.

          J.

  2. Recently Departed
    Recently Departed says:

    Greetings Jeff, and Thank you for the analysis you offer to the Action Sports Brands. Actionsportsind has it right, the “resignation” of Pete Fox, was not voluntary. 2013 was only the second time in 40 years that the company was in the red, driven down by sluggish sportswear business. The design direction Pete took the company in over the last five years, chasing trendier brands fashion ideas, alienated the “Fox Customer” that guy living east of the 5 freeway who is bemoaned by all of the hipster/surf/boutique types. That Fox Customer didn’t appreciate the new design direction, (or the heftier price tags) and multiple Sportswear designers got the ax, including the head of mens, and the head of womens, long before it finally came down to Pete…the sacred cow. No scapegoating here, his direction in sportswear, while current and trendy, was given the monetary thumbs-down by the Fox Customer, and the major retailers who support him.

    This March, word came down the pipeline that there were going to be layoffs ” in several weeks”…there WERE 24 people laid off in April, mostly designers. (Note to HR and Senior level readers: When the word got out that these layoffs were coming, employees didn’t take the firing risk lightly; resume’s and portfolios went out, and more than 24 ADDITIONAL staff voluntarily left Fox Head in the next sixty days)
    Further, Nick Adcock froze salaries, froze hiring, and retracted Fox company contributions to the 401K program.
    Those still with Fox the summer of ’14 were left with twice as much work, at the same pay as ’13, with less benefits.
    In some cases, staff were asked to perform the job functions of two or more departed staff. Morale? What morale?
    Enter the suits. The weeks prior to Pete’s departure, Geoff Fox and family members appeared at the new Irvine building, quietly meeting with Bill Bussiere, HR, and senior staff. Something was afoot, but all was kept very secret.
    The secrecy continued with Pete’s departure, and Nick Adcock said some kind words regarding Pete’s leaving to pursue “other interests” of course…and then retreated for the next four months into his office, only emerging to walk groups of suits around the buildings catwalks, peering down at the sullen rank and file, and speaking in hushed voices. Every other day, a group of suits with ipads or clipboards would be ushered through the building, culminating in a closed door conference room where Nick’s PowerPoint of the future would play. Sighting of VF senior staff in mid-July sent tremors through the building, as the prospect of Fox being for sale started to really gather steam; Nick Adcock and Bill Bussiere denied ALL talk of the company being for sale, which was so transparent that these two lost credibility with all but the most gullible.
    Through September and October, with talks of new hires in the rank and file postponed to “sometime in ’15, after more senior positions are created and filled”, another dozen plus legacy employees left the company.

    • jeff
      jeff says:

      Hi Recently Departed,

      I appreciate taking the time to put together the time line. You will notice that I cut off the bottom part of your comment. I’m interested in figuring out what goes on with the goal of learning some lessons about how to do business, and I didn’t think your other comments added anything useful to that. It’s also not fair as you are unidentified. All stories have two sides to them and we all have our biases, including me.

      You may or may not be aware that I’ve done some turnaround work with family businesses. That it would be pleasant or comfortable when things get tough is not a realistic expectation. I have no information on Fox Head’s financial condition at the time Nick Adcock took over, but I can tell you from experience that you do what you have to do if you’re trying to make payroll and save the company. The pleasantries and standard ways of doing business go out the window. Was that what happened here? I don’t know, but it’s an explanation for some of the things you describe. Maybe that’s my bias.

      Thanks for the comment.

      J.

  3. actionsportsind
    actionsportsind says:

    Recently Departed, ^ all of this is what the OC rumor mill was churning, but interesting to hear it in such detail. I wish them the best, in motocross, it’s a fabulous brand.

    • jeff
      jeff says:

      Whatever happened and whoever’s feet we want to lay blame at, let’s hope they are through it and can focus on building the brand. I imagine Altamont will insist.

      J.

  4. Micky
    Micky says:

    Very interesting conversation which had one comment from “actionsportsind”that immediately raised my red flag and that was “for better or worse-he loves that brand more than life itself it appears.”
    Loving a brand can be the worst thing in the world if you are trying to run a successful business and you are the CEO! Emotions should be left to the consumers, both internal and external, but the CEO needs to have the clarity in decision making that will ensure that the brand will prevail in a profitable manner. Love and clarity don’t always work well together!
    I do hope that Fox Head prevails and creates an exciting future without being dragged too much into the past!

    • jeff
      jeff says:

      Hi Micky,
      Really good insight! I suspect Fox Head will be fine now. Great brand, and Altamont will see that they run well. What are you up to?
      J.

    • actionsportsind
      actionsportsind says:

      Well said Mickey, and as I said “for better OR WORSE”.
      And as Jeff said, I think Scott Olivet/Altamont will make this brand shine.

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