“Your life is a do-over. You’ve got a clean slate,” said Billy Crystal in the movie, “City Slickers,” to his pal who thought he’d wasted the best years of his life. And, while Cloudveil has by no means wasted its years, there is reason to believe that perhaps the company, which has experienced more than its fair share of bumps and bruises in 13 years, is getting a do-over, too.
After quite a few months of being shopped around, Cloudveil returned to private ownership in an announced asset sale to Windsong Brands on Feb. 16. (Click here to read the news release on SNEWS®.) Jim Reilly, no stranger to the Cloudveil brand, was named CEO and is also one of the major investors. One of the other major investors is Reilly’s neighbor and friend, Bill Sweedler, CEO of Windsong Brands.
“The great news about this acquisition,” Reilly (pictured right) told SNEWS in an exclusive interview on Jan. 18, “is that Cloudveil gets a fresh start from an operations standpoint, while at the same time inheriting a very healthy order book, great product and a great image. Anything that has happened historically with the company has been erased.
“It is a once-in-a-lifetime kind of deal. We are buying only the assets we want, as there is no company to buy. Spyder is winding down Cloudveil Mountain Works, and we are starting up Cloudveil Mountain Peak. This is such a super clean deal, and as a result, our new company is basically a plug-and-play launch and I thank the Spyder team for that.”
With Reilly now CEO, SNEWS confirmed that Steve Sullivan was indeed no longer part of the company he co-founded with Brian Cousins in 1997. Sullivan resigned on Jan. 25.
“My resignation from Cloudveil was a planned move, allowing me to assist in working on high-level transitional issues and due diligence,” explained Sullivan, currently enjoying an international surfing break. “Although the last 13 years have been extremely rewarding, it was simply time for me to take a step back and re-evaluate both personal and professional objectives. I am very proud of what Cloudveil has become, and look forward to watching the brand continue to evolve and achieve its full potential in the years to come. I sincerely thank all of those who put energy and effort into making Cloudveil the brand it is today.”
For Reilly, he returns to running a brand he helped acquire in January 2005 when he was the vice president of Sports Brands International. (Click here to read the Jan. 13, 2005, SNEWS story, “Cloudveil acquired by Sport Brands International, owners of Fila.”) Unfortunately, Cloudveil quickly became entangled in Fila’s financial mess, and despite best efforts, began to suffer as promised resources were not delivered. Fortunately, Reilly had connections with Apex Partners, a UK private equity firm, which had recently acquired Spyder. As a result, Cloudveil was acquired yet again -- this time with greater promise of success, it seemed -- by Spyder in February 2008. (Click here to read the Feb. 6, 2008, SNEWS story, “Spyder pulls Cloudveil out of the Fila-related quagmire.”)
But unforeseen circumstances put a crimp in the plans and promise of full support for Cloudveil as Apex decided after the acquisition that it was going to seek a sale of Spyder. “It was quite disappointing when we bought Cloudveil and Apex decided to sell the company -- you might start to think that Cloudveil is snake-bitten,” Reilly told us. “All the deals have strategically made sense, but something got in the way of execution.”
What got in the way this time was the economy as the bottom fell out of the market. Suddenly, through no real fault of its own, financial insiders told us, Spyder went from healthy and sellable to struggling and trying to right a ship that was taking on water. Spyder needed to focus on its business, and as a result, Cloudveil was shopped again.
Though the company had numerous suitors, Spyder CEO Tom McGann told SNEWS, in the end, the best opportunity for the company came from an offer Reilly presented.
“Cloudveil is a great brand and it just needs focused attention,” McGann said. “Truly what precipitated this deal is the fact that capital is like lubrication, and I need to use all my lubrication for my own engine -- Spyder. Jim (Reilly) and Windsong will do very well with this brand.”
McGann confirmed that Spyder was winding down its Cloudveil company, Cloudveil Mountain Works. He reiterated that his company was fully committed to ensuring existing dealers are getting the service and support they need from Cloudveil, as well as delivery of product in the spring 2010 order book.
To ensure the transition of Cloudveil business from Spyder to Cloudveil Mountain Peak is smooth, James Samuel has been named general manager for the Cloudveil brand for the short term. Samuel will oversee spring 2010 orders and service to retailers for Cloudveil and remain an employee of Spyder through the transition. Samuel was previously director of global sales for Cloudveil.
Seeking to assuage retailer worries about Cloudveil, Samuel told SNEWS, “I have admired the Cloudveil brand for years, and the new ownership was all about getting the right and best match for success for the brand. The fall 2010 book they are inheriting is the best line we have ever had -- so strong, in fact, we have been able to bring back customers who had left previously.”
He added, “My role will be to make sure the transition is smooth for everyone, that retailers get all they need and expect in terms of delivery and service for the spring 2010 order book. And to help Windsong and Jim get all the information they need to make the right decisions for the company moving forward.”
Reilly said he is very excited about the opportunity he has been presented with Cloudveil. “I told the guys we would have to be complete knuckleheads not to get this right this time. There is a great team in place. Sulli (Steve Sullivan) did a very good job in the last year, with bookings up 25 percent. The fall line is fantastic. We will focus immediately on fulfilling everything that the brand has promised, as well as fulfilling the long-term promise of the brand.”
Although he is based in Connecticut, Reilly said Cloudveil would remain headquartered in its mountain home of Jackson, Wyo. He plans to spend half his time in Wyoming as he did before when SBI owned Cloudveil.
“This brand is now in private hands with very strong financing. I know and love the brand, and I am one of the owners. The product and supply chain side of the business will be executed even better than it has in the past,” Reilly said. “And, as we move forward, I am only going to fix those things that held the Cloudveil brand back. This really is an extraordinary opportunity.”