BDE Quarterly report: Metcalf stepping down in 2015

Search
Go

Discussion Topic

Return to Forum List
This thread has been locked
Messages 1 - 20 of total 53 in this topic << First  |  < Previous  |  Show All  |  Next >  |  Last >>
emunsing

Trad climber
Berkeley, CA
Topic Author's Original Post - Aug 11, 2014 - 02:33pm PT
I'm listening to the Black Diamond Equipment Inc. Quarterly Earnings Investors' call. Some highlights:

-Peter Metcalf planning to step down as CEO next summer (2015)
-Zeena Freeman, former SVP at The Gap, is coming onboard as president
-Freeman is being groomed to replace Metcalf next summer
-Planning to cut 25% of BD's hardware items (no specifics).

The BD brand's strategic direction seems to be the growth of softgoods, and the firm talked about POC's growth in hardgoods while they didn't mention any plans for the BD brand hardgoods.

Anybody else feel uncomfortable with what's going on? Having Metcalf step back as CEO and bringing a non-climber on as the future head seems like an extreme pivot to me.


apogee

climber
Technically expert, safe belayer, can lead if easy
Aug 11, 2014 - 02:36pm PT
"...former SVP at The Gap, is coming onboard as president"

A senior VP at The Gap will be the President of the largest climbing gear manufacturer in the US?

Why am I not surprised?

Chouinard must be rolling over in his Patagonia Stand Up shorts right now. Or laughing robustly.
emunsing

Trad climber
Berkeley, CA
Topic Author's Reply - Aug 11, 2014 - 02:38pm PT
More details on the hardware reductions: they are planning on cutting the 25% of the hardware SKUs which have the lowest profit margins and lowest growth. They'll be focusing on "a more tightly curated line"

Could this mean the end of BD aid climbing, big wall, and big mountain gear, which has a limited market and not much sales? Could mean some interesting business openings for those who want to fill the gaps which BDE leaves behind...
Jacemullen

Trad climber
Oceanside
Aug 11, 2014 - 05:34pm PT
Wow. Crazy that BD is turning into just another lifestyle brand.
Rankin

Social climber
Greensboro, North Carolina
Aug 11, 2014 - 05:54pm PT
Inevitable given that BD has a fiduciary responsibility to shareholders.
Roots

Mountain climber
Tustin, CA
Aug 12, 2014 - 01:06pm PT
Been to REI lately? ..there's a whole new customer base there now.

Good thing there are plenty of "core" companies out there that actually focus on climbers.
Trashman

Trad climber
SLC
Aug 12, 2014 - 01:12pm PT
Big changes for sure, and I don't like the leadership change, but keep in mind, eliminating 25% of SKUs is very different than 25% of products. The rumored discontinuation of their boot line alone would be close to 25% of their SKUs(one for each size of each model)
JEleazarian

Trad climber
Fresno CA
Aug 12, 2014 - 01:13pm PT
Been to REI lately? ..there's a whole new customer base there now.

That was my thought exactly. I joined REI in 1967, when it was still a company by and for mountaineers and climbers. Maybe it's good that climbing hasn't become so mainstream that it can support a huge mass marketing effort.

It might also be worthwhile to remember how BD came to be in the first place. Chouinard Equipment, morphed into Great Pacific Iron Works, ended up in Chapter 11 when a person using one of its harnesses (harni?) died when the harness failed, and there was insufficient insurance to cover the damages awarded. The Chapter 11 Plan sold the business, resulting in Black Diamond. Manufacturing climbing equipment simply doesn't generate the profit -- but generates a great deal more risk -- than keeping to "soft goods."

John
paganmonkeyboy

climber
mars...it's near nevada...
Aug 12, 2014 - 01:13pm PT
but think of the t shirts !! you'll totally look like a climber...
pc

climber
Aug 12, 2014 - 01:15pm PT
If you've been thinking about getting gear, now's the time. It might be gone by the time you "get around to it" or a bump in sales might help "protect" the gear you like.

$.02 where it might count,
pc
caughtinside

Social climber
Oakland, CA
Aug 12, 2014 - 01:25pm PT
Metcalf leaving in 2015 was probably decided when they sold a couple years ago. You can't just buy the company and have all the brains leave the same day. Guy got paid, agreed to work 3 more years and train up the new blood. Gotta transition into those MBA former Gap VPs. Nothing surprising here. More low quality high margin softgoods and logo Ts headed our way.
apogee

climber
Technically expert, safe belayer, can lead if easy
Aug 12, 2014 - 02:18pm PT
Why do you think BD has garnered this reputation amongst serious climbers, gf?

The comments above aren't just rants issued for no apparent reason.
pyro

Big Wall climber
Calabasas
Aug 12, 2014 - 02:19pm PT
BD needs to diversify...
Mungeclimber

Trad climber
Nothing creative to say
Aug 12, 2014 - 02:26pm PT
Hope that he is happy doing whatever he wants to do.

Hope that BD as a company sustains itself in the climbing gear market.

paganmonkeyboy

climber
mars...it's near nevada...
Aug 12, 2014 - 03:14pm PT
one word - microfractures...
Roots

Mountain climber
Tustin, CA
Aug 12, 2014 - 03:25pm PT
The lot of you! Full disclosure, I count Mr Metcalf as a friend and have done a limited amount of business with his company over the the years. IMHO he has done a hell of a job working 6.5 days a week for the past 25 yrs; I judge a man by his body of work and what I see is a legacy of continuous improvement and breadth in a product line. No surprises that there is and will be cuts to the product line; just as climbers trim their rack to remove pieces of gear that they never use, as opposed to pieces that get used rarely but will save your ass when they do get deployed so it is with ANY companies product assortment. Sure there will be some folks pissed, but for example i cast off small bd stoppers years ago in favor or rp's (still on the last of my stash of those). So lets bite our tongues shall we, BD lives and dies like any company on its ability to give the people what they want; it's a brand with its roots and business in the climbing and backcountry skiing communities, something no rational CEO would abandon.

I don't think anyone is saying anything negative about Mr. Metcalf...it's the decision to replace him with someone that (assumedly) knows nothing about climbing. No doubt the replacement knows a thing or two about business..

My bet is Metcalf and a few close friends/investors start a new company after a short stint of early retirement.
TradEddie

Trad climber
Philadelphia, PA
Aug 12, 2014 - 03:31pm PT
it's a brand with its roots and business in the climbing and backcountry skiing communities, something no rational CEO would abandon

A rational CEO needs to maximize shareholder returns, and selling hardware won't do that. If maintaining a token level of "serious" hardware is necessary to maintain the corporate image and enhance the sales of high margin consumer soft goods, then hardware will be kept. Unless there is something in the corporate charter requiring hardware to maintain a priority in the portfolio, no rational CEO would expend any unnecessary resources on such a low volume range of products.

A privately owned company, with an owner more passionate about climbing than making money would make very different decisions.

TE
sos

Trad climber
nyc
Aug 13, 2014 - 01:30pm PT
Black Diamond's stock has underperformed the S&P 500 since Clarus acquired BDE and renamed itself. The growth anticipated from the core Black Diamond merchandise lines never materialized which means that Kanders overpaid to get into the outdoor soft-goods game. To me, and the rest of Wall Street, which has fallen out of love with the stock and pushed it down from $15.15 in Fall '13 to just $7.96 today, it looks as though Metcalf was demoted on that failure. Although he will retain the CEO title for another year, his new position is effectively "brand ambassador." It was emphasized on the call that 100% of P&L responsibility for all key product lines will vest immediately into the new president who has zero outdoor industry experience and who has been with BDE for all of 15 minutes. The salvation plan is to open branded stores,a-la Apple, to market their soft-goods crap to the end purchaser, and to cut expenses by eliminating SKUs that don't show sales growth (the core-climbing hardware business). Wannabe Patagucci.

Zeena Freeman, the new President and soon to be CEO, is a Philips-Andover alum with zero outdoor industry experience. Aside from shuffling from division to division inside of GAP Stores, she has not managed, in the last 20 years, to hang on at any company or in any single position for more than 27 months. BlackDiamond - I wish you more than luck.
SteveW

Trad climber
The state of confusion
Aug 13, 2014 - 03:40pm PT

John E
I'm not sure that harness failed. There were rumors that
the deceased may have removed it to relieve himself and
did not reattach it correctly. But the suit was settled
to protect Patagonia. . .
donini

Trad climber
Ouray, Colorado
Aug 13, 2014 - 04:02pm PT
The harness did not fail...it was pilot error.

Certainly Chouinard was concerned about a Chouinard Equip. suit piercing the corporate veil and affecting Patagonia.

Chouinard Equip. sales were at 6 million and Patagonia sales were multiples of that and growing fast.
but
There was the human factor. Chouinard no longer climbed and it was during the sport climbing craze and YC did not like the direction that he thought climbing was headed.
there
is
always
more than meets the eye.

Kudos to Peter and his team for the fabulous job they did with Black Diamond!
Messages 1 - 20 of total 53 in this topic << First  |  < Previous  |  Show All  |  Next >  |  Last >>
Return to Forum List
 
Our Guidebooks
spacerCheck 'em out!
SuperTopo Guidebooks

guidebook icon
Try a free sample topo!

 
SuperTopo on the Web

Recent Route Beta