Black Diamond Exploring Options to Open Retail Stores
No decision has been made, but company officials told investors they are giving a serious look at retail stores to promote the brand and sales
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Black Diamond is investigating avenues to open a collection of brand retail stores as it expands its product lineup beyond hardgoods into apparel, company officials told investors Monday.
The outdoor and wintersports brand would join a growing list of industry manufacturers looking to bolster direct-to-consumer channels and brand promotion through physical stores of their own. Black Diamond already has one retail showroom at its Salt Lake City headquarters, but wants to consider opening more locations on a national and global level.
Large outdoor brands — such as The North Face and Columbia — and smaller ones — like Keen and Icebreaker —have been on a consistent store-opening kick of late, along with expanding higher-margin direct-to-consumer sales online. As OBJ has reported, the surge has tested relationships with independent specialty retailers to varying degrees.
Black Diamond Inc. CEO Peter Metcalf told investors that decisions and details regarding the possible stores could emerge within the next year. He noted the company plans to add another senior executive, of which one of his or her responsibilities would be to handle direct-to-consumer and retail efforts.
“When and if we do it, because we haven’t announced formally that we are doing it yet, it will be something that really is the brand manifestation in a way that is accretive to how you think about BD, equal to the product, equal to the marketing,” Metcalf told investors during the company’s conference call. “Everything about it would have to be just right so that the stores would be, if we did them, just a great, not only profitable, but a great way to showcase the brand.”
Metcalf said any possible Black Diamond store would likely focus on the Black Diamond brand itself, despite the company also owning Gregory, Poc Sports, and Pieps.
“Consumers enjoy and appreciate and patronize brand stores and stores that really can capture the feel, the essence, and personality of a brand as what they’re seeking,” Metcalf said. “There are a host of really great specialty stores out there that do a good job of showcasing two or three brands, plus hardgoods, plus, plus, plus. So as we think about it, we think about discrete brand stores.”
Black Diamond Inc. (including all its brands) reported sales up 8 percent for the third quarter 2013, in part fueled by the addition of Black Diamond apparel, introduced to consumers this fall, but company profits have turned to three straight quarters of losses due to later ordering and softer winter hardgoods sales.
Metcalf expresses satisfaction with the apparel launch, but notes the company’s intended “scarcity strategy” early on, in attempt to keep inventories low and demand high. The initial fall 2013 lineup debuted in 240 independent specialty stores with 25 styles and 440 SKUs. Spring 2014 will add another 50 styles and 608 SKUs in a total of about 400 retail doors.
By fall 2014, Metcalf projects a total of 119 Black Diamond apparel styles and 1,945 SKUs, including women’s, to be sold in approximately 800 independent specialty —and perhaps some new brand — retail doors.