The recent inauguration of Barack Obama was a reminder that, in this country, we expect peaceful transitions of political power. But we're much more wary of transitions in the business world. When a new owner takes the helm of a company, things can often go adrift.
So, SNEWS® was delighted to get word that Northern Lights Trading Company in Bozeman, Mont., was enjoying a very smooth transition since Jay Allen purchased the store from Mike Garcia in May 2008. Garcia, who had owned the store since 1979, retired to spend more time enjoying the outdoors -- click here to read the announcement of the sale and new ownership.
In financial terms, Northern Lights did as well or better than could be expected in the last eight months, considering that it not only had a new leader but also faced a souring economy. Store manager Matt Parsons said that ski sales were not only up, but the store posted a record December for the category. Holiday sales were solid as well.
"We actually had a pretty good Christmas," Allen told SNEWS, noting that overall numbers were off slightly compared to last year, but many outdoor retailers would consider that a success in today's economic climate. Also, he said he was "blown away" by the response to a sale held before Christmas at the second Northern Lights location -- known as the Barn -- which houses paddling products, as well as sale and discount items. The "gambler's sale" was held on a Friday, Saturday and Sunday, with items marked off 10 percent, 20 percent and 30 percent on the respective days.
"It was extremely well received," said Allen. "We had people filling the parking lot and out in the street all day long on Sunday."
While the store has remained profitable during the change in leadership, success can also be measured in the fact that Northern Lights' employees have adjusted quickly and responded well to Allen's approach to the business.
"He brings focus and whole lot of business sense. That's something we're really excited about," said Parsons, adding that he and most of the other store employees had not received much formal retail business education. "I remember one time he asked me to create a flow chart for a new position, and I replied, 'A what?'" Parsons said with a laugh.
Prior to purchasing the store, Allen worked for years in finance positions for a medical supplies company in Chicago. But he always had a great love of the outdoors. "My office was near the REI, and I used to go in there and just go poke around at lunchtime," said Allen.
Allen and his wife, Susan, are natives of Kansas, and they would spend all their vacation time in the mountains of the West. "We started out using all our vacation time to do ski trips in Colorado, Utah and Lake Tahoe. And then we decided one summer on a whim to go out to Telluride for the summer," he said, adding that they became interested in all sorts of outdoor activities and desired to move West.
Allen left his life in corporate America and began investigating the idea of purchasing some type of business related to the outdoors. An intermediary put him in touch with Garcia, and Allen and his wife took their first trip to Montana to see the shop. "We walked in and though it was a great store," said Allen. "It's a striking two-story building, and Mike built it using all reclaimed lumber, even before people were really into using reclaimed timber.
"When I was shopping, the employees were great too. It seemed like there was a great bunch of people, and I thought, 'This is a really good operation he's got here.'"
In addition, Allen and his wife believed that Bozeman would be a great place to raise their two young children, so "everything just kind of lined up," said Allen.
One thing that appealed to Allen was that Northern Lights was already a smooth-running operation that didn't need a major overhaul. Because the business was stable, the situation would allow Allen time to learn more about retail. "I didn't want to come in and shake the tree, so to speak. I didn't want to disrupt what they had," he said.
Parsons said that Allen's decision to mostly leave things as they were played a big role in the easy transition. "One of the things Jay said when he came on board was, 'Just keep doing what you're doing.' He didn't want to change things, and he trusted us."
"One of first things I did when I bought the store was sit down and talk to all the buyers, managers and employees to try and connect and understand the people who work here," said Allen.
The employees appreciated that Allen preserved the store's casual working atmosphere. "He recognized the culture," said Parsons. "He didn't come in and say we couldn't wear flip-flops." Parsons said that Allen also went out of his way to provide the staff some perks. "For our Christmas party, we rode a snowcat up to a yurt where we had some great food at a moonlight dinner and had sled rides. On the way back, we were in a bus, and we played trivia games and Jay threw prizes to people. Those little things…a lot of people might not think about those, but they mean a lot to us."
"A lot of people who work here could make more money doing other things, so I want to make sure they get some benefits. One of my big objectives is to make it a fun place to work, and I like to make it a collaborative atmosphere," said Allen, who learned a lot about teamwork and working hard when he played offensive tackle for the University of Kansas. (Though, he jokes, "We weren't very good back then.")
Another key to the successful transition was the good working relationship between Allen and Garcia. When asked to offer his thoughts on the key to a successful change of ownership, Allen said the former owner and new owner must be able to communicate well with each other.
"When I evaluated the store I looked at Mike Garcia too, and you have to be able to work with (the previous owner) in terms of the handoff," said Allen. "You ask, is this someone I can transition the business with and learn from? And he's looking at whether he can hand his life's work over to you. It's important to have good communication with the previous owner, and Mike was just great."
As a result of their work together, Northern Lights remained a familiar place to so many loyal customers. Parsons said word has gotten around town that the store has a new owner, and "people are still coming in asking us if the store has changed. We say no, they haven't changed a whole lot."
Granted, Allen is improving a few areas of the Northern Lights operation, such as adding more informational content to the store's website (www.northernlightstrading.com). But in these days of change, Northern Lights is, for the most part, changing very little, and doing just fine.