Confluence backpaddling furiously yet again

Just when it looked like Confluence might be floating into calmer waters with the appointment of new CEO John Bergeron in March of this year, the company managed to steer itself back into rough waters that has left reps and the staff bailing frantically to stay afloat with Confluence's specialty dealers.
Author:
Publish date:

Just when it looked like Confluence might be floating into calmer waters with the appointment of new CEO John Bergeron in March of this year, the company managed to steer itself back into rough waters that has left reps and the staff bailing frantically to stay afloat with Confluence's specialty dealers.

An avalanche of angry and frustrated emails hit the SNEWS desks in mid to late May, from retailers across the country, all taking Confluence to task for, essentially, reneging on a commitment to ship preseason orders that were placed as early as last September.

The kicker for these retailers was that Confluence had opened up Dick's and was shipping the discount retailer large volumes of Pungo kayaks, selling for $399, retail. At the same time, Confluence was notifying its specialty retailers that boats expected for delivery in May would not actually be shipped until July or even August -- just in time for late summer mark-down sales.

"I told our rep last year, no surprises," Norm Cavallaro, owner of North Cove Outfitters in Connecticut, said.

Cavallaro, along with just about every other big name paddlesport dealer on the East Coast and Midwest, who contacted us and who is a Confluence dealer, was livid. Orders have been cancelled or reduced we've been told.

The only winner in this story is Liquid Logic, which has, according to a number of retailers we spoke with, happily stepped up to the plate to deliver orders Confluence has dropped.

Kelly Woolsey, vice president of marketing and sales at Confluence, told SNEWS, "I understand that dealers are upset they are not getting their preseason orders they gave us in September. Should we have expanded distribution without taking into account capacity? Probably not. It is a mistake we made, and rest assured we are going to fix it."

Woolsey also told us that he's stepping away from marketing at the company for the time being to focus on sales and mending fences. Stepping into the marketing shoes will be Scott Robards, currently the web master at Confluence. Robards has a degree in marketing.

"My focus now will be much more on sales, focusing on communicating the messages our dealers need to hear that were not being communicated well and repairing tampered relationships with specialty dealers from the road and in their offices," Woolsey said.

To add to the grief, Mike Hooks, sales manager at Confluence, resigned his post. According to the company, he resigned to pursue his interests in music. Insiders close to Hooks told us otherwise, and intimated that Hooks resigned because he was tired of working 12-hour days for a company that was focusing too much on the bottom line and not enough on specialty production or dealers.

We asked Hooks to comment and he added only that, "I've had a wonderful run at Confluence and it was just time for me to leave. I hope to stay in the industry."

Woolsey told us that Hooks was under a lot of pressure and it was his decision and his alone to leave.

He also added that, "Come Outdoor Retailer, we are going to make offers to retailers that have never been done in this industry, in part to mend fences when it comes to being able to supply them with what we promise to supply."

SNEWS View: How did Confluence get in this mess? Well, you can thank American Capital Strategies for this one. Under interim President Bob Sharp, an ACS company man, it reportedly took ACS four to five months to get their hands around the financial picture. But, as we feared, the only picture they got was a bottom-line financial one which tells only part of a story.

So, as a result, despite the advice of Woolsey and others at Confluence, ACS saw only two years of lackluster performance and they didn't allow the company to ramp up production as requested or needed. At the same time, distribution was expanded, and Wilderness Systems sales were taking off.

Factor in only so many ovens and molds and, even cranking out boats seven days a week with three shifts, Confluence could build only so many boats. So Dick's gets its boats, but boats promised to dealers, including boats sold at sales in May to retail customers at huge sales events by Confluence and ACS staff, don't get delivered. Ouch!!!! Confluence has to realize that when they don't deliver a boat, a retailer will probably give them a second shot. When a retailer does not fill an order, they often lose a customer forever.

ACS is crying crocodile tears over the loss in potential sales to be sure. But worse for them, they are in danger of losing specialty business. Confluence argues that the Pungo Classic was the boat sold to Dick's, an old boat with no features that retailers did not want anymore. Specialty dealers point out, rightfully, that what Confluence has done is give Dick's a boat that was sold at their stores just over a year ago, for $479, and now their customers are seeing the boat in Dick's for $399, including boat accessories. That's not the kind of message a specialty retailer will easily explain, and teaches consumers that they can always buy a product for less.

Confluence will argue that the Pungo in Dick's didn't even come close to offering the features in other Pungo models available only at specialty. And while that might be true, it is transparent to the consumer. All he or she sees is that a Pungo at Dick's is nearly $200 less than current Pungo models now being sold at specialty.

Woolsey is the right man to work for Confluence smoothing feathers and communicating the company's message, so hearing he is hitting the road to do just that is a very good thing. Woolsey also assures us that as Confluence moves forward, it will not repeat these mistakes and it will work to ensure that models at discount stores are completely differentiated from the models at specialty. That's a start. Delivering what you promise is by far the more important issue, and Woolsey says Confluence is working on that too. We've been assured that next year, ACS has given the go ahead to ramp up the production well in advance of the season to ensure orders are filled.

We said in our article on Bergeron in March that, "Part of Confluence's challenge has been one of consistency of communication. IF, and note that is a BIG if, Bergeron and team can focus Confluence with a consistent message that the company's core retail base will trust, the goals of expanded distribution make loads of sense." Extracting from this latest communication and delivery debacle will take more than lip service. Bergeron now has his work really cut out for him, simply making up ground he's lost because of poor communication.

We'd add to the above -- no more surprises either.

Related

Confluence names a turnaround expert as new CEO

Confluence has finally named a new CEO, self-proclaimed turnaround expert, John Bergeron. Bergeron's appointment comes nine months after former CEO Bill Medlin's ouster on April 29, 2002. During that time, Confluence has been managed by interim CEO, Bill Sharp of American Capital ...read more

Confluence continues to paddle rough water

Confluence Watersports was forced to eliminate 71 positions on April 19, resulting in 69 layoffs. Of the two who were not laid off, one was a company controller who was let go in January and the company has decided not to fill the position. The other, Keith Wallace, was the ...read more

Confluence's Kelley Woolsey Talks To SNEWS®

Confluence's senior vice president of sales and marketing, Kelley Woolsey, is no stranger to challenges. Yet it would be safe to say that in the weeks and months following his infamous dealer letter (click here to read related story with accompanying link to that letter) of last ...read more