When SNEWS® broke the news of restructuring at American Recreation Products (ARP) in July, there were rumblings more shifting and moves would likely occur within the then newly formed Boulder Outdoor Specialty Group (BOSG). Those moves were made official on Dec. 15, as ARP announced various internal changes to its staff.
Among them is Kenny Ballard's appointment as president of BOSG. Geoff O'Keeffe has been bumped upstairs with a new title of vice president of operations for ARP, answering directly to Jim Baumann, who was named president and CEO of ARP on Oct. 6 (Click here to read that SNEWS story, "George Grabner is replaced by Jim Baumann at American Rec.")
ARP has three distinct divisions, as we reported in our July 18 story, "Restructuring at Kellwood leads to layoffs and changes in operations" (click here to read). The BOSG division includes Kelty, Sierra Designs, Ultimate Direction, Kelty KIDS, Slumberjack and the Wenger license for outdoor products in North America. The second division is Royal Robbins, operating, as before, independently out of Modesto, Calif. And the third division, known as the Mass Market Business and includes Wenzel and its licensees, will continue in St. Louis, Mo.
Internationally, Canadian Recreation Products (CRP), based out of Toronto, Canada, continues as an independent division and is directed by Ted Fortuna. CRP is focused on serving the mass side of the business, we were told.
The changes in leadership at BOSG means that Paul Gagner, president of Sierra Designs, is out of a job and now looking for work. Joining Gagner on the unemployment lines is Matt Sungy, who was just hired as head of marketing for Sierra Designs in October. (Click here to read the Oct. 15 SNEWS story announcing his hire, "American Recreation Products hires Matt Sungy as director of marketing.")
Russell Rowell has been named director of product development for equipment, overseeing all equipment research and development for BOSG. Melodie Miller has been named director of product development for apparel. While we were told her primary responsibility will be with Sierra Designs, since that brand currently has the vast majority of apparel SKUs, she'll also be overseeing apparel R&D across all brand platforms.
Alison Snider will now be in charge of dealer services and warranty/repair for BOSG as its customer service manager. Jonathan Hinrichs has been named finance and operations manager, overseeing all inventory management, financial reporting and analysis, facility operations and serving as BOSG's international liaison.
Peter Novak, formerly the sales director for Kelty, is now BOSG's sales director for the eastern United States, while Jason McGibbon, formerly sales director for Sierra Designs, is now the sales director for the western region. Josh LeBaron, who formerly oversaw sales for Slumberjack and Wenger, is now the sales manager for all brands.
The changes in the sales structure highlight perhaps the biggest overall shift for BOSG. On Dec. 15, Ballard and O'Keeffe were busy on the phones notifying all of their independent rep agencies that their services would no longer be needed as of 2009. In all, approximately 60 independent reps received walking papers, we were told.
Ballard told SNEWS -- before the company made the news public early Monday morning -- that over the next 30 days, BOSG would be hiring an employee-based rep team that will begin with eight reps in each of the key sales territories around the country: Pacific Northwest, Rockies, West, South Central, Southeast, West Great Lakes, Mid-Atlantic and New England. Each rep will then likely hire additional staff as needed to serve each region. SNEWS has heard that a number of the existing independent reps have expressed strong interest in going forward as in-house staff.
"We have a unique advantage of having enough sales volume to be able to do this and fund it," said Ballard. "It is something a lot of us in brand management have always wanted to do, as the benefits of having a dedicated force with 100-percent focus and mindshare on your brands are clear."
Realizing the challenges and questions that will come with a move from independent to in-house reps, Ballard told SNEWS, "I will be traveling a lot more, as will Peter and Jason, to get in front of our retailers to make sure we are meeting all of their needs," said Ballard. "The biggest risk in making changes is that we don't execute and then we hear, 'I told you so.' We cannot and will not allow that to happen."
Ballard told us that part of the overall plan is to also launch a B2B service that will allow retailers to manage their ordering and inventory management process. In addition, BOSG has put, Ballard said, significant dollars aside in the budget to establish a strong retailer training program to assist retailers in better selling BOSG product.
SNEWS® View: One of the three amigos is gone -- Paul Gagner. For those wanting to stay in touch with Gagner, he can be reached by email at email@example.com. O'Keeffe has been bumped upstairs but is still working very closely with Ballard, so that bodes well. No question in our minds that this restructure is a move to streamline operations and pare expenses to the barest level possible, while still retaining the integrity of the brands. This is not change for change's sake, however. It is certainly more than that.
Businesses all over the world are facing enormous challenges maintaining a profitable business both in today's economy and as they look to the future. Every company we have spoken with in the last several months is looking at vastly different ways to conduct business. There is no doubt that the consumer is behaving differently and buying different goods. Demands on go-to-market costs and supply-chain costs are all increasing. So much energy is spent on a product well before the consumer hears about it or sees it. Those costs, as well as costs of serving the goods, have to be pared to remain competitive. At the same time, it would be dangerous to any business to pare costs to such an extent that it is only able to serve part of its supply chain effectively. And there is the greatest challenge. Deciding where to shift resources and where to keep them deployed.
It will remain to be seen how the shift in rep strategy will play out for BOSG. Now, each rep in each region will have to service three levels of product: Sierra Designs and Wenger at the pinnacle, Kelty in the middle tier, and then Slumberjack for the cast-and-blast crowd. While the mindshare is 100 percent, that is a LOT of brand knowledge to expect from one individual, and an immense amount of retail understanding to expect too as each rep works to best service his or her retailers. We don't doubt the talent of the sales leadership, nor the talent of the leadership driving the bus (Ballard and O'Keeffe), but this is truly one tall order.
On the plus side, the company is investing significantly in training, as well as a B2B service connection (can you say CenterStone perhaps?) that will allow retailers a bit more control of their own destiny in regard to product ordering and inventory levels.