Climbingshoe.com ad stirs up a small tempest -- SNEWS® investigates

Climbingshoe.com ads in Urban Climber and Rock and Ice sparked concern that a Mad Rock employee could be using the ads to influence retail pricing for competitors' products.
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Ads from Climbingshoe.com, appearing in both the June/July issue of Urban Climber and the July issue of Rock and Ice, inspired a spate of emails and calls into the SNEWS® offices. The national ads, featuring discounted pricing on Montrail and La Sportiva shoes, as well as a few discounted Mad Rock shoes (most Mad Rocks appeared to have list pricing), raised eyebrows, not so much because of the discounting, but because Climbingshoe.com is owned by Joe Garland, who is also employed by Mad Rock.

The implication among industry pundits is that Garland, as a Mad Rock employee, could be using the ads to sway national pricing at the retail level for two of his company's competitors -- La Sportiva and Montrail. It was also alleged by those that contacted us that Climbingshoe.com was not authorized to sell La Sportiva products, and was likely obtaining the products from Garland's Climb Max store in Portland, Ore., or his Pagan Mountaineering store in Moab, Utah.

SNEWS® contacted Mark Day, national sales manager for La Sportiva, on May 31. He confirmed that Climbingshoe.com was not an authorized dealer of La Sportiva. Day also told us that as soon as the ads appeared, he had placed the Climb Max and Pagan Mountaineering stores on a "no ship" status.

As we continued to investigate, SNEWS® received an email, sent the evening of June 1, allegedly from Garland, stating that Garland had completed the sale of his Climb Max store to manager Josh Tomi and several other staff that same day, and that Garland had not been involved in running the Portland store since early March.

On June 2, Garland called us from Moab saying that while he had not actually sent the email (he had asked his former business partner, Gregg Zullo, to craft the email for him), it accurately represented his thoughts. When we pressed him about the controversy, he acknowledged how others might believe that he was trying to affect pricing for La Sportiva, but asserted again that he had nothing to do with the ad.

"I can see where someone might make that assumption," Garland told us. "The first I heard of this problem was yesterday, and I called the guys and told them to fix the prices on the website, contact Mark, and move on. It was an innocent mistake on their part as they are just learning some of the additional responsibilities that come with ownership."

When contacted by SNEWS®, Tomi confirmed that Garland had nothing to do with the ad in any way, and that he was just learning what he could and could not do within the constraints of existing dealer agreements. He also told us that the local La Sportiva rep knew they were selling some shoes online and it had not been a problem, until they went national with an ad.

"Our plan was nothing more sinister than trying to clear out some old product and generate some needed revenue in light of the sale of the store from Joe to us," Tomi said. "Joe had nothing to do with the ad, that's true and I deeply apologize to La Sportiva and to other retailers -- causing a problem for everyone was not our intention."

Tomi told us that since Garland was no longer buying for Climb Max, he wanted to diversify the climbing shoe mix and not carry such a broad range of Mad Rock shoes. He added that he wants a broader selection of brands and styles to better serve his customers.

PaganGear.com and Climbingshoe.com will continue to be operated by Climb Max until the end of 2006, at which time, Garland indicated, the ownership of those websites would transfer to Pagan Mountaineering and its new ownership group.

When asked about Pagan Mountaineering, Garland told us that the sale of that store had hit a hiccup. He did confirm that his current partner, Brian Jonas, would be continuing with ownership, but the difficulty arose from finding suitable partners.

If the current slate of potential investors and the deal on the table falls through, Garland told us, ownership of Climbingshoe.com and PaganGear.com will be up for grabs. Garland added that if Tomi and Climb Max wanted to make a bid for the site, they could.

SNEWS® View: Looks like Joe Garland is working hard to rectify a very LARGE conflict of interest issue -- holding the title and responsibilities of national sales manager for Mad Rock, while at the same time holding the title of owner of two stores that sell competitors' products. We have heard from insiders that Young Chu, owner of Nelson Sports, based in Santa Fe Springs, Calif., and the owner of Mad Rock, had been putting pressure on Garland to make the choice -- work for Mad Rock or own retail stores. For the record, the lines blur even more when you consider that Nelson Sports produces climbing shoes in Asia for many of its Mad Rock competitors.

For the record, Garland has been employed at Mad Rock for the last three years. In the fall of 2005, he sold his interests in Spokane, Wash.-based, Mountain Goat Outfitters to the other shareholders. He gained control of Climbingshoe.com through his partnership with the owner of Craggers in New Hampshire, which closed in 2003. Garland's not done diversifying his interests, though. He confirmed that he was now embarking on a path of being a real estate developer, having just acquired the old chamber of commerce site at the entry to Moab. He told us he's seeking to add more retail space and turn the land into a mini shopping area.

As for Josh Tomi and the new ownership team at Climb Max, we wish them well. We fully believe the ad was an innocent mistake. Lesson learned, and time to move on.

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