Black Diamond Equipment plans for a “very meaningful and substantial” reduction of its gear and equipment SKUs and could exit one or two product categories later this year as part of a restructuring plan first reported by SNEWS in mid-April.
The latest changes, announced May 5 during the company’s first-quarter 2014 earnings conference call, include the resignation of Black Diamond Equipment President Ryan Gellert and the promotion of Tim Bantle as Black Diamond's global brand manager.
“We are appropriately and thoughtfully realigning our resources toward those with stronger growth potential … both from a profit standpoint and meaningfulness to the brand,” said Black Diamond Inc. CEO Peter Metcalf. "Looking at the numbers, we understand that we love product and our teams have allowed us to get too much product and it just doesn't pay back on itself," he told investors. "We believe that we'll be much more efficient with a greatly reduced SKU count." He said more details would emerge in the next quarter, as well as a likely conclusion to the brand’s exploration to sell its Gregory brand.
As SNEWS reported a month ago, Black Diamond Inc. (NYSE: BDE), parent to its namesake brand, along with Poc Sports, Gregory and Pieps, is shuffling both operational and financial resources to better align with its faster growing areas — Poc and Black Diamond apparel. The company reported its first-quarter 2014 revenue up 7 percent to $54.5 million, largely thanks to gains from those two segments, officials said. Quarterly net income came in at a loss of $1.3 million, albeit an improvement versus a loss of $3 million a year ago.
Despite the realignments, Metcalf reiterated that Black Diamond remains committed to its hardgoods gear core that has defined the business.
“We want to curate those categories,” he said. “And we can do it with a tighter budget and a tighter group of people.”
The potential move to a smaller, more focused product lineup may not come as a big surprise with Bantle, Black Diamond’s former director of apparel, taking a larger leadership role at the brand. In prior interviews with SNEWS, Bantle has stressed the importance of reigning in SKUs and production runs to combat rampant retail discounting.
“I continue to see a movement toward a totally curated wardrobe,” he told SNEWS a year ago. “People are buying nicer products and fewer of them. I can’t say that this is necessarily what is happening in the apparel category as a whole, where outlandish use of color or down market retail pricing have dominated the market for the last several years, but it’s right for us as a brand.”
In addition to Bantle’s promotion, Martijn Linden (previously the brand’s apparel design director) was promoted to vice president of merchandising and design of apparel; and Thomas Hodel (previously Black Diamond's European product manager) was promoted to global ski line product manager based out of Basel, Switzerland. The company also recently named another European, Niclas Bornling (formerly with Salomon), as global vice president of marketing. The global nature of the hires and promotions reflect the company's growing international sales, Metcalf said, which now account for more than 50 percent of the business.
The company is interviewing candidates for a new position of president of Black Diamond Inc., the parent company, with Metcalf remaining CEO.