Black Diamond and Gregory Mountain Acquired.

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the kid

Trad climber
fayetteville, wv
Topic Author's Original Post - May 10, 2010 - 08:31am PT
Black Diamond and Gregory Mountain Acquired by Publicly Traded Clarus Corp.

hot news of the day!!!

here is the link...
http://www.sportsonesource.com/news/spor/spor_article.asp?section=8&Prod=1&id=33072&utm_source=Listrak&utm_medium=Email&utm_term=http%3a%2f%2fwww.sportsonesource.com%2fnews%2fspor%2fspor_article.asp%3fsection%3d8%26Prod%3d1%26id%3d33072&utm_content=nrgsales1%40gmail.com&utm_campaign=SGB+UPDATE+--+Week+in+Review


ks
Studly

Trad climber
WA
May 10, 2010 - 09:23am PT
another good reason to buy Metolius.
rlf

Trad climber
Josh, CA
May 10, 2010 - 09:47am PT
Hmmm... This ought to be interesting...

Hopefully this doesn't turn into another North Face.
couchmaster

climber
pdx
May 10, 2010 - 10:10am PT
Wow, good points up there above.
donini

Trad climber
Ouray, Colorado
May 10, 2010 - 10:17am PT
Sorry Studly, Metolious has been trying to sell for some time but nobody wants to buy them.
Spider Savage

Mountain climber
SoCal
May 10, 2010 - 10:22am PT
Hey, MBAs can be climber's too. Rich guys, poor guys, level playing field on the wall.

Good to see an old surfer get rich.

Someday: "Fish Products acquired by Bosch Tools. In a deal with $75 million, Bosch Corporation has made...."
TGT

Social climber
So Cal
May 10, 2010 - 10:22am PT
Bianchi owns Gregory now.

I wonder if they are only selling off specific product lines?
Jaybro

Social climber
Wolf City, Wyoming
May 10, 2010 - 10:24am PT
Well, they put a good spin on it. We'll see if it's the end, while hoping for a new beginning...
Mungeclimber

Trad climber
sorry, just posting out loud.
May 10, 2010 - 11:48am PT
uh, Black Diamond has a clothing line, and it was fine where it was...

http://www.blackdiamondequipment.com/en-us/shop/mountain/clothing


of for the love pate, here we go again TNF stylee
miwuksurfer

Social climber
Missoula
May 10, 2010 - 11:48am PT
I wonder if all the stockholders and board of directors are still going to do their "dawn patrols".

Wow, they were so proud of their "employee owned" business. Guess it was just a ploy to get me to buy cams.
steve_s

Boulder climber
middleton, wi
May 10, 2010 - 12:06pm PT
For what it's worth Gregory has been employee owned for roughly 2 years now. They bought the company back from Bianchi a while back.
zeth0101

Trad climber
Oakland, CA
May 10, 2010 - 12:08pm PT
crap good thing i just got a set of c4s before they turned to untrustworthy sh#t. this is sad. i second the metolius now or even dmm or wildcountry.
tom woods

Gym climber
Bishop, CA
May 10, 2010 - 12:23pm PT
Slaves to shareholder value seems to be a terrible business strategy.

The beauty of the miracle of the modern market, is once the company appears to be profitable, the shareholders will sell it again, perhaps taking the company private so it can go public again.

I hope the cams don't suffer due to the shenanigans of American capitalism.


msiddens

Trad climber
Mountain View
May 10, 2010 - 12:23pm PT
Damn- I really hope this isn't a sign of things to come. Like, poor thought out designs.
scooter

climber
fist clamp
May 10, 2010 - 12:31pm PT
Metoluious, Wild Country, DMM!!!! Why would anyone use climbing gear that is made in China? As I have said before China cannot make dog food or tooth paste or toy paint safely. Let alone be trusted to manufacture the one thing that keeps you from being talus mashed potatoes, your cams and 'biners. PLUS.....the whole free Tibet thing and all the other hippy climber causes that China completely disregards.
Howie

Trad climber
Calgary, Alberta
May 10, 2010 - 01:17pm PT
Don't forget to support Mike Graham and his Stonemaster line of clothing.
Great gear.
Howard.
tom woods

Gym climber
Bishop, CA
May 10, 2010 - 01:17pm PT
Skipt- I don't blame the Chinese for being the beneficiaries of American Corporate shenanigans.

Labor is the big expense, to make good stuff you have to pay a good wage. Perhaps they can pay a good wage in china and make good cams. It's tough to say, but I guess we'll find out.

Are the Chinese really Communist anymore? They sure seem like a hyper radical free market capitalist country to me.

It would be tough in this country to cut your baby milk with plastic to make a few extra pennies, not saying people here wouldn't try, but we have regulations and lawsuits and stuff.

They must the wild west over there in China to get a way with it for as long as they did. Then they sentenced a business owner to death for the melamine? Wow!

Labeling those guys with the American conception of communist might not entirely accurate.




steve_s

Boulder climber
middleton, wi
May 10, 2010 - 01:21pm PT
Apologize for any misunderstanding. This was what I meant as to whether Gregory was employee owned as well.

http://www.gregorypacks.com/news/id/24

Having worked for Gregory I really hope they can keep their name and heritage. Anytime there's a "Corporate Takeover" like we're seeing here we all get worried that the product will go to crap. It rarely does and soon enough people stop caring who owns what.
k-man

Gym climber
SCruz
May 10, 2010 - 01:42pm PT
Three Cheers for Wired Bliss!!
JEleazarian

Trad climber
Fresno CA
May 10, 2010 - 01:42pm PT
I wonder what economic factors brought this about. Climbing has certainly changed form the days you could drive up to Chouinard Equipment in Ventura and see Chouinard and Frost there, watch Lost Arrows in the making, and buy seconds from the Great Ones themselves.

The press release says Black Diamond was looking for a merger partner for a year. This tells me that either something was wrong with their capital structure, or somone(s) very high up wants to retire and doesn't trust known successors. Either way, one wonders.

And please don't dis American companies so quickly. Shenanigans didn't bring our economy to lead the world. After all, Steinway still makes the best pianos.

John
tom woods

Gym climber
Bishop, CA
May 10, 2010 - 01:47pm PT
No- never tried to open one, but we did try to sub out some of our work to China. The quality was an issue, so we stopped with one company, and had better results with another.

Anyway, our experience was mixed, but had nothing to do with "communism" and everything to do with business, good old fashioned money based business.

The sad reality is that we pretty much had no choice but to move some production overseas. People can't/won't pay more here so it's tough to raise prices and labor is the biggest expense.

Skip- I'm probably reading more into your posts than you are actually saying, I just don't but the "communist" thing at all. They are businessmen to the core over there.

HighTraverse

Trad climber
Bay Area
May 10, 2010 - 02:53pm PT
Last line of the SportsOneSource article, referring to Clarus:
Black Diamond and Gregory mark its first acquisitions.

Clarus is apparently two wealthy guys. A publicly traded shell company that's been looking for companies to buy. They already have controlling interest in Gregory.

This could go either way.
The North Farce/A5/REI/Sierra Designs/Kelty way or the "good" way.

We'd all like to see them continue with innovative and high quality products that are focused on What We Do.
BD is currently profitable.

There will be "economies of scale" as they merge management and infrastructure (think IT, supply chain, distribution and finance). Some middle management and infrastructure jobs will go.

They'll do their best to keep both companies profitable (assuming Gregory is profitable).
To do that, they could move to mass-market products (YUCK)
or stay true to their customers, or a mix.
More stuff will likely be made in China.

It's an odd union because BD has a strong line of packs competing with Gregory's only business. Who will get the pack business? Probably Gregory.

Stay tuned for more at 11.

On the China bashing:
It's all in how you manage it. Apple and Patagonia (among others) have very high quality suppliers. They also push/require their suppliers to reduce their environmental impact and improve working conditions. We get cheaper products at the same or better quality and the workers get better lives.

I once asked Chouinard about their use of Asian suppliers. He replied that their quality is often better than he could get here at any reasonable cost. Quality is Patagonia's #1 requirement. Then they will apply their own standards for working conditions and environmental responsibility. They require the entire package.
Acer

Big Wall climber
AZ
May 10, 2010 - 02:54pm PT
Thats Right.

Wired Bliss is Made, Supplied, and Owned by AMERICANS.

http://www.wiredblissusa.com

http://www.supertopo.com/climbing/thread.php?topic_id=1151669&msg=1165056#msg1165056
stevep

Boulder climber
Salt Lake, UT
May 10, 2010 - 03:25pm PT
Aliens...made in America.
Chrysler...made in America.

Location is not a guarantee of quality. Not all Chinese manuafcturing is Six Sigma. Nor is all American.
Hein

climber
San Francisco, CA
May 10, 2010 - 03:38pm PT
"Most recently, they built and operated Armor Holdings, a company that designed and built a wide variety of personal protection and safety equipment."

I wonder what coming from military equipment/being a defense contractor means for their ethics.
Knuckles

Trad climber
Everett, Wa
May 10, 2010 - 03:47pm PT
A great deal of why China makes crappy product is because US consumers and companies continue to demand crappy product. China can make some very nice stuff, we're just not willing to pay for it.
HighDesertDJ

Trad climber
Arid-zona
May 10, 2010 - 04:17pm PT
Wow. I better get some cams now.
Gene

Social climber
May 10, 2010 - 04:19pm PT
As of 2010 we have achieved nearly every component of that approach other than the capital structure and the backstop for management, especially myself.

Other than that, Mrs. Lincoln, how did you enjoy the play?
ncrockclimber

climber
NC
May 10, 2010 - 04:20pm PT
I see this news and I cringe! I am pushing up my timeline to purchase a few additional cams because I feel that there is a probability of a decine in quality.

Look at it this way - Currently, BD makes good stuff. BDs management / ownership are running the business in the best way they can, and have what they believe is an efficient cost and OH structure. Now Clarus comes in and buys the company. The price they paid is commensurate with the value of the company as it currently exists plus the value of future growth under the current plan. If they continue on the current path, Clarus will just break even. Clarus is buying BD and Gregory because they think that they can make the business more profitable. How? Well, Clarus really brings nothing to the table that will make better equipment. They don't know how to open up new markets or improve quality. The only way they can win is to cut costs. Think reduce staff, outsource, leverage spending dollars, expand brand into new market segments, etc. None of that sounds like anything that will benefit me since I just want good gear and the dollars they save are going to the pockets of the new owners.

I have seen this to many times before. Usually, the business goes downhill. In the majority of these transactions there is value destruction due to an exodus of qualified people and a decrease in quality and efficiency.

Some of the above is a little simplistic, and opens the door for a lot of "but, if…" and "you forgot to mention…" arguments. However, I did business development for a Fortune 100 company for 3 years and have seen first-hand numerous examples of how private equity and corporate acquisitions work. Although there are exceptions to the rule, almost 90% of these things fail to create shareholder value over a 10 year horizon, and I have NEVER personally seen one that really worked in the short term.

Like I said, I am buying my C4s today...
HighTraverse

Trad climber
Bay Area
May 10, 2010 - 04:37pm PT
look for a bump in BD sales for about the next 6 months
Oplopanax

Mountain climber
The Deep Woods
May 10, 2010 - 05:16pm PT
The computer I am posting this from was made in China...
Binks

climber
Uranus
May 10, 2010 - 05:23pm PT
Buy DMM dragons, not C4's. BD is sold out. Not interested in their stuff anymore.
tom woods

Gym climber
Bishop, CA
May 10, 2010 - 06:20pm PT
We're all worried about the cams, but didn't black diamond already offshore the hardware?

I bet the climbing hardware market isn't a huge part of the profit of the company.

How about the soft goods, and the skis? Maybe that's where the company plans to grow, because as stated above, that is the goal of the buyer especially of a public buyer.

Maybe the worry about the cams is overstated?
mucci

Trad climber
The pitch of Bagalaar above you
May 10, 2010 - 06:34pm PT
Dmm Cams will never come close to the versatility of a c4. Very poor design.

I have never and will never worry about any of my 3 different generations of BD cams.

Never heard of any BD cams breaking, never.

I am happy about Bliss, purchase some cams from them recently.

Where is the safety issue with new BD cams?

Is the "SCARE" justified?

Have the "chinalots" failed?

BD is the workhorse on almost everyone's rack I have ever seen.

Mucci
Mighty Hiker

climber
Vancouver, B.C.
May 10, 2010 - 06:37pm PT
donini's going to be really pissed to hear that they're going to change the blue camalot to mauve. Marketing experts have advised the new owners to go to a pastel palette for all profit centres.

Silliness aside, isn't it great that there are all these companies making amazing gear for us, always coming up with new ideas? The "any colour, as long as it's black" days in the world of climbing aren't that long ago. I hope that Black Diamond makes a smooth transition, and continues what is now about 50 years of service to our community.
Binks

climber
Uranus
May 10, 2010 - 06:39pm PT
Dmm Cams will never come close to the versatility of a c4. Very poor design.

Please substantiate.
Slakkey

Big Wall climber
From Back to Big Wall Baby
May 10, 2010 - 06:48pm PT
Tom makes a very valid point and to be honest if if it were possible other climbing gear companies would more than likely do the same thing. The climbing gear market is pretty well oversaturated. From an innovation standpoint there is not a whole lot of room to grow when it comes to just climbing gear. How many cams can the market really support or the same with biners, nuts etc? As noted it appears the Metolius would like to expand too and all this about companies with green technology, climber friendly etc. may have a bit of truth to it but think about it. It also is another way of creative marketing to attract your dollars.
SteveW

Trad climber
The state of confusion
May 10, 2010 - 06:52pm PT

Let's hope Peter Metcalf will still be involved with
BD. Hopefully he will keep the quality as it has been.
(excepting their Nforce ascenders). . .
mucci

Trad climber
The pitch of Bagalaar above you
May 10, 2010 - 06:57pm PT
Binks-

"Please substantiate. "

Short stem which is not conducive to "Deep" placements.

No "Thumb loop" or any way of clipping in close to the unit.

Thin Dyneema sling, which is by far the most awkward sling I have ever used on a cam. Not the same rigging as the regular DMM cams.

I have used this cam now on 3 occasions. I own the #3 Dragon, tried tons of placements, it walked on me in placed a BD never had.

These are my experiences and I understand that others may have a different take.

Not for aid climbing, where they are totally worthless.

.02cents

Mucci
Slakkey

Big Wall climber
From Back to Big Wall Baby
May 10, 2010 - 07:04pm PT
I like a number of things that DMM puts out but am with Mucci on the Dragons. POS IMO.
stevep

Boulder climber
Salt Lake, UT
May 10, 2010 - 07:19pm PT
The article says Metcalf is staying as CEO of the new company.
And BD holds its China manufactured stuff to the same QA standards the US stuff is held to.
mucci

Trad climber
The pitch of Bagalaar above you
May 10, 2010 - 07:23pm PT
The Chief-

Nope, no complaint on the Techs, single runner, and a hole big enough to attach a thin cord loop for a fifi, just like so many have on original friends..... How do you think BD and others came up with the idea of a "thumb loop"?

I only own the small zeros, strictly aid climbing where the placement matters most not the distance travelled from it.

I do not own techs, but the DMM 4cu's have a "LOOP" to clip into as well as a double runner that is much easier to manipulate that the new sling on Dragons.

No arguing here about the quality of workmanship, rather the design.

Tell me Chief, what is so great about cams that have no way of clipping in close to the stem?

Worthless for aid.

Now if we are talking about a cam used exclusively for "Free" climbing then you can count me out of the discussion. Versatility is king in the grand scheme of cam production.

Mucci
mucci

Trad climber
The pitch of Bagalaar above you
May 10, 2010 - 07:29pm PT
I was speaking in terms of it's use on my rack. They come out where the placement matters.

Of course they have a thumb loop!

Don't have any problem with the zeros.

So what say you on the Dragons?
mucci

Trad climber
The pitch of Bagalaar above you
May 10, 2010 - 07:40pm PT
Fair enough, I don't personally like the metolius line, but they are a good alternative to BD.

However we are now talking about a single vs double stem unit. Not in the same ballpark.

I still don't see why BD quality has become an issue?

Failures? Any accredited to the move of production to China?


Mucci





Bob D'A

Trad climber
Boulder, CO
May 10, 2010 - 07:42pm PT
The chief wrote: Oh yeah, watch for this to happen in the next 5-8 weeks:

BD Equipment now readily available at your local Wal/K-Mart!


Mark my words.



Yeah...the way you stated that GU on Half Dome would be the end all.

Drama queen. You need to get a life.
Bob D'A

Trad climber
Boulder, CO
May 10, 2010 - 07:51pm PT
You're on...not that I give a sh#t what or how they do. By July 15 C4's will be in wal-mart? I don't think so.

dirtred

climber
May 10, 2010 - 07:56pm PT
Clarus Corp. (OTC: CLRS) announced it is acquiring Black Diamond Equipment and Gregory Mountain Products in two separate but related transactions. Under the terms of the agreements, Clarus will pay $90 million in cash for Black Diamond and $45 million for Gregory, both subject to adjustments. In both cases, approximately 50 percent will be paid with Clarus common stock valued at $6 per share and approximately 50 percent will be paid with a seven-year, 5-percent subordinated note. For the year ended Dec. 31, 2009, on an unaudited basis, Clarus reports that Black Diamond and Gregory produced combined revenues of approximately $113 million. Of that, Black Diamond accounted for $86 million and Gregory $27 million.

In addition, a number of owners of Black Diamond shares, including current Black Diamond CEO Peter Metcalf, will use a portion of their cash consideration from the sale to purchase shares in Clarus at $6 per share. After the closing of transactions, the board of directors for the new company will own approximately 35 percent of the shares. Click here to read the official May 10 news release regarding the acquisition.

Metcalf told SNEWS® at 6 a.m. PST, prior to the release going out, that this deal put into place the final two pieces in an evolving strategic plan that needed to be implemented -- a clear succession plan for himself, and the establishment of a long-term capital structure that would ensure a lasting and autonomous company.

“I went to my board during our annual meeting last year and shared my concerns and plans with them, that included doubling the size of the business over the next five years as we have during the last five,” Metcalf said. “At the same time, I told them we needed to seriously think about our capital structure and to talk about me and succession planning for our company.”

As a result of the sale, Metcalf told us that he now has a very strong board that will serve as a backstop for the CEO position and the senior management team, and a long-term capital structure that ensures the future of Black Diamond.

“It is very exciting for all of us,” Metcalf told SNEWS. “We have the means by which we can go public without all the usual time, cost and energy spent doing it, and we are able to do it while maintaining the integrity and culture we have created over the 21 years we have been in business.”

In announcing the acquisition via an email letter to shareholders on May 10, Warren Kanders, executive chairman for Clarus, wrote, “We believe these brands create a unique platform to build a large, global, diversified company in the outdoor equipment and lifestyle markets both organically and through targeted acquisitions.”

During an 8:30 a.m. EST conference call to announce the sale to investors, Kanders stated, “We have been interested in the outdoor industry for a long time, largely because we believe the trends toward wellness, environmentalism, and participation in high-performance, lifestyle-defining sports are providing meaningful tailwinds that benefit well-positioned companies in this space. Black Diamond and Gregory are among them, and provide an excellent entry point into this market with their respective brand positions and distribution scope to allow for significant organic growth opportunities as well as the leverage points needed to make future acquisitions work.”

He added, “As soon as practical following the closing of the transactions, Clarus expects to relocate its headquarters (from Stamford, Conn.) to the current headquarters of Black Diamond in Salt Lake City, (to) transition the company to a national stock market listing, and (to) seek shareholder approval to adopt ‘Black Diamond Equipment’ as the company’s new name.” Gregory will be one of its brands.

The SEC filing regarding the sale notes that Clarus expects the “integration and combination of Black Diamond and Gregory will produce incremental profit primarily from revenue synergies created through leveraging each business’ distribution network to grow various product categories and brands in geographies and end markets in which they currently are not sold, as well as from cost savings.” The SEC filing also notes that currently approximately 50 percent of the newly formed Black Diamond Equipment’s sales are expected to be in North America, approximately 30 percent in Europe, and approximately 20 percent in Asia, Africa, the Middle East and South America.

While relatively new to Black Diamond, Kanders is no stranger to the Gregory brand. He acquired the brand when he was at Armor Holdings in 2004. Armor was sold to BAE in 2007, but Kanders regained control of the brand as a majority shareholder in Gregory as part of the investment partnership that acquired Gregory from BAE Systems in early 2008 (Click here to read our March 27, 2008, story, “Gregory Mountain Products back in private hands following management-led purchase.”). Kanders will continue as executive chairman of the new company.

Rob Schiller, vice chairman of Gregory and its former president as well as a partner with Kanders in the 2008 acquisition of Gregory, will be appointed executive vice chairman and become a member of the company’s board of directors. Peter Metcalf, the co-founder, president and CEO of Black Diamond, will be named president and CEO of the new company and will also become a member of its board of directors. Robert Peay, Black Diamond’s CFO, will continue to serve in that role with the new company following the closing of the transactions. Philip Duff, one of the original investors with Black Diamond, a current member of Black Diamond’s board of directors and a former CFO for Morgan Stanley, will also be joining the new company’s board.
Who is Clarus?
Since December 2002, when Clarus sold substantially all of the operating assets of Clarus’ legacy e-commerce software business, the company retained its public company structure, its cash resources, and net operating loss carryforwards, which Kanders told us offer very nice tax benefits. A carryforward is an accounting technique that applies net operating losses to future years’ profits in order to reduce tax liability. Generally accepted accounting principles (GAAP) specify that loss carryforwards can be used in any one of the seven years following the loss.

Since its delisting from the Nasdaq in 2004 because it essentially had no real operations, Clarus has been operating as an over-the-counter stock shell company with a goal of redeploying its assets into an operating business or businesses that would serve as a platform company for future growth. While several deals came close, none reached fruition, Kanders said, but he remained patient knowing he would only invest when he found the right company or combination of companies that held a promise of growth and success.

Kanders told SNEWS that he fully expects the new company, Black Diamond Equipment, to be listed on either Nasdaq or NYSE once the transaction closes.

What will the new Black Diamond Equipment look like?
While Kanders told SNEWS that Gregory would be a product line within the Black Diamond Equipment company, he was also very clear that both Black Diamond and Gregory would maintain their individuality and brand names for clear market differentiation. No decisions have been made, we were told, regarding operational, staffing or company location changes. For now, Gregory will remain in Sacramento. Acting Gregory CEO Gray Hudkins told us he would continue to serve in that role as long as Metcalf desires, and when a change is made, he will return to working for Kanders as he has for the past eight years.

Though there is brand overlap, there is also significant brand distinction in the distribution platform globally. In the United States, both Gregory and Black Diamond count REI and EMS as significant retail partners. For Black Diamond, Backcountry.com is also considered a significant retail partner. However, both companies maintain that the core strength and majority of sales are realized through smaller specialty outdoor retailers. Overall, Gregory reports it is distributed through 900 retail doors, 500 of which are located in the United States. Black Diamond says it has 1,000 individual retail accounts, representing 1,500 doors globally. In addition to Black Diamond’s account base in North America and Europe, it has 24 distributors in Asia and the South Pacific, one distributor in Africa and four in South America.

Interestingly, the majority of Gregory’s sales are currently realized through the Asian market, with the product offering there expanding into daypacks, briefcases and shoulder bags. It also owns two retail stores, one in Tokyo and the other in Seoul, South Korea.

Black Diamond is based in Salt Lake City with over 375 employees worldwide. It owns a 22,000-square-foot manufacturing facility in Salt Lake in addition to a wholesale distribution center. It also has European offices, led by Christian Jaeggi, located outside of Basel, Switzerland, and a distribution facility close by in Germany. In 2006, Black Diamond established operations in southeast China with a Black Diamond-built and -managed facility, including a state of the art 100,000-square-foot manufacturing and distribution space with attached offices that are operated and staffed by Black Diamond employees. BD Asia is currently led by Ryan Gellert. Both of Black Diamond’s manufacturing operations are ISO 9001 certified by European-based auditors.

Gregory is currently based in Sacramento, Calif., and has approximately 100 employees worldwide. It also operates a 41,000-square-foot manufacturing facility in Calexico, Calif.

Kanders and team certainly expect success and growth, but made it very clear to SNEWS there is no head-long rush for expansion and increased sales in the plan. “We are at an inflection point I believe,” said Kanders. “And Peter (Metcalf) understands that business is both an art and a science, and while we were presented with a very unique opportunity to combine the best of Clarus and Black Diamond and Gregory into one company, we don’t expect to grow quickly just for the sake of growing quickly.

“Peter is one of the most interesting people I have ever met and so special in the way he combines the business and the passion and love for what he does with pure intelligence and common sense,” added Kanders. “We are a very lucky company, and we now have the opportunity to work together to move this new company forward in a methodical but purposeful manner.”

Serendipity is alive and well
For a number of the executives, this acquisition, merger, coming together or, in more simple parlance, the linking up of Gregory and Black Diamond solidifies a thread of connection that has loosely bound them for decades.

In 1973, Metcalf, then a high school senior at Garden City High in Long Island, wrote a letter to Wayne Gregory who was then running his first company, Sunbird. Metcalf was going to attempt a first ascent of Mount Fitzgerald with some of his high school buddies and told Gregory that they thought his packs were the best and would he please support the effort. Gregory promptly sent Metcalf and team a few packs, and sold them others at a steep discount.

Dion Goldsworthy, now director of export sales at Gregory, was one of the owners of Rock Creek Lodge near Bishop, Calif., in the mid-80s when Metcalf and his wife, Kathy, were married at the lodge.

Jim BoisD'Enghien, director of sales and marketing for Gregory, worked closely with Black Diamond when he was running sales and marketing for Atlas Snowshoes to develop the first crampon-compatible snowshoe in 1997-1998. The designers that worked on the project for Atlas were Daniel Emerson and Ben Warner.

And, for Wayne Gregory, who is Mormon, he is now part of a company that is headquartered in Salt Lake City, the church’s global base, and led by the same man who years ago first asked him for a pack to go climbing in Alaska.
It all seems meant to be.

A plan 21 years in the making
Black Diamond Equipment was founded on Dec. 1, 1989, when the assets of Chouinard Equipment Ltd. were purchased out of Chapter 11 bankruptcy by Metcalf, Maria Cranor, Meredith Saarinen, Hong Kyu Kwak, plus other former Chouinard employees and a few outside investors, including Duff. Yvon Chouinard had placed the company in bankruptcy in early 1989 to protect it and Patagonia from several liability lawsuits filed against Chouinard Equipment by individuals who were alleging there were insufficient warnings on climbing products about the dangers of climbing.

Metcalf told us he and his team have been able to reach this point simply because they created a unique company structure, with no professional investors, no partnerships, a true board of directors, and friends and family who were investors with a long-term view.

“This was about a vision and making a difference all along,” Metcalf told us. “I went to family, friends and fools when we first put this deal together and while I would not commit to a liquidity date and made them understand this was not about pulling money out in four to five years, I did promise them we would run this professionally, with a board and I would serve at the pleasure of that board. We have not put one penny into this business since 1989. Our first goal was to get to $5 million a year in sales, and to reach a point where we could make a real difference by being corporate champions of innovation, and protecting access and preserving wild places.”

Metcalf also said the employees are all owners of the company through its KSOP, so they have felt invested in the future of the company, its direction, its culture and will now be rewarded for that loyalty.

Just as the original plan in 1989 was unique in its approach, Metcalf and Kanders are embarking on the next chapter that is equally unique in its inception.

“While it is termed an acquisition, in many ways, it is a rollover for many shareholders and a way to get Black Diamond public and stay autonomous,” Metcalf told SNEWS. “This deal was the answer to my long-term questions and it ensures the permanence of this company. It also ensures that we are able to raise the stature of the outdoor industry in Utah with a company that is now even more influential in being a champion for access, environment and preservation of wild places.

“It is truly wonderful for the next generation of managers behind me. I think about how I felt starting this company 21 years ago -- it was enthralling and intimidating. I am ultimately not going to finish this line on the climb we start today. It is our managers who now have a strong brand and a global platform that will take us all the way there, and that makes me very happy,” he said.

Added Kanders, “We got lucky. None of us planned this. What I love about Peter is his personal and business relationship to climbing. There is a lot of teamwork in climbing and in a significant way you have to rely on your partners, and as a result, those partnerships tend to be very meaningful and very deep. I feel this new company venture is like that…it is very, very exciting for me. I am truly overwhelmed and a very lucky guy.”
--Michael Hodgson
https://www.snewsnet.com/cgi-bin/snews/process
stevep

Boulder climber
Salt Lake, UT
May 10, 2010 - 10:15pm PT
Chief, the Black Diamond clothing that appears in Costco and in the cheap clothing stores is not made by Black Diamond Equipment. Two different companies.
donini

Trad climber
Ouray, Colorado
May 10, 2010 - 10:45pm PT
Looks like Peter M. is positioning himself for more time to climb while he can still do more pull ups than anyone else at BD.
Bob D'A

Trad climber
Boulder, CO
May 10, 2010 - 10:45pm PT
The chief wrote: BD GEAR.....

BDA!

That includes any item that has the BD LTD Trademark logo on it!

Just like that TNF stuff did as soon as they went "public"....... as they have been in them Wal/K-Marts.


Ok
Lambone

Ice climber
Ashland, Or
May 10, 2010 - 10:52pm PT
Depending how they alter the structure of the company, this could just mean a much larger R+D pool for BD.
bmacd

climber
Relic Hominid
May 10, 2010 - 10:52pm PT
Arcteryx was bought out by Saloman about ten years ago for 16 million. The orignal owner stayed on and the product quality is still there today. No doubt we will see bigger RD investment in future at BD
10b4me

Boulder climber
Hell A
May 11, 2010 - 01:21am PT
I doubtthat you will see camalots, or crampons being sold at walmart
ryanb

climber
Seattle, WA
May 11, 2010 - 02:01am PT
This merger isn't about selling bd gear at wallmart. It is about developing bd's distribution network in asia (ie the largest emerging market for leisure products). Look at the job postings on their website and what clarus did with gregory.

I just hope some of the new cash gets used to build BD's stable of engineers as well so they can finally finish their "holy grail" telemark binding etc.

healyje

Trad climber
Portland, Oregon
May 11, 2010 - 02:52am PT
Looks to be a retirement hobby / investment activity for a bunch of ex-BAE/Armor defense guys with cash they had park somewhere, and this time it wasn't going to be software, but rather something a bit more tangible they could hold in their hands.

P.S. As I understand it Metolius has been approached several times to sell and the suitors backed away for varying reasons, mostly to do with the perceptions of risk / liability for this category or class of products. I suspect the defense guys are a little more adventurous in that respect and this will probably be a sign such deals / products aren't as risky as sometimes thought.
Hawkeye

climber
State of Mine
May 11, 2010 - 03:08am PT
interesting.

two comments. when you walk into the BD corporate area it is easier to see why they are more desireable as a purchase than metolious. they act and feel more like a serious company.

dont get me wrong, i have never had any problmes with either BD ro metolious. in fact as a consumer i am impressed with metolious.

but....when i put my professional hat on, i wil never forget the short time that i had visiting metolious. when i nweigh my experience dealing with high tech companies i always thought that metolious was lucky. they need some serious help in gaining the corporate image at the factory if they want to sell.
healyje

Trad climber
Portland, Oregon
May 11, 2010 - 06:06am PT
As a tech consultant and [ex]ISO auditor who spends a lot of time around 'glam' clients with big campuses and glitz galore, I like Metolius just the way they are. They are homegrown, unpretentious, uncompromising, true to a lifestyle they want to live, and climbing. From what I can tell there isn't a single individual involved who could give a rat's ass about the 'corporate image' of their facility. What they do care slavishly about is producing great gear they all want to pull off their rack when they're on a route.

Pretty simple, and works for me anyway.
rlf

Trad climber
Josh, CA
May 11, 2010 - 08:51am PT
I think their is value in both approaches.

BD has chosen both a internal and external corp. front. They have the nice internal corp. image of a nice building, lobby, offices etc. They also have a strong external image through marketing and quality products they offer.

Metolius has chosen the external only model. The quality of their products and the marketing goes just as far.

After 30 years of being in both the business and engineering end of things, I've seen both work, and both fail.

If I had a dime for every "corporation" with a flashy office building fail miserably while watching the "mom & pop" shops practically operating out of a garage make millions, I'd be a rich man.

Both models have value if executed and managed correctly.
the kid

Trad climber
fayetteville, wv
Topic Author's Reply - May 11, 2010 - 09:40am PT
donni,
you are incorrect on metolius. they were for sale and a few people had offers but not the right offer. sales are good, doug is psyched and does not want to sell now. BUY METOLIUS!!
Hawkeye

climber
State of Mine
May 11, 2010 - 11:21am PT
chief, healyje...you are missing my point. you have to look at the companies from a buyers perpsective not a climbers. climbers used to love aliens too...

metolius makes great stuff, innovative, etc.

but at some point the business model of great stuff manufactured by climbers only goes so far.

paintrain

climber
May 11, 2010 - 11:57am PT
Annapurna was climbed in wool
That is kind of funny - probably wool underwear. They did a lot of gear refining and specialization of down clothing for that ascent. They learned a lot from previous Himalayan efforts. Reference - Herzog's book.

Metolius has been for sale for a long time.
Apples to oranges. BD has a lot wider product range and revenue base. It makes it more attractive to an investor than a niche company like Metolius.

More money into R&D
Doubtful. More money into marketing and sales. More money into the higher margin, higher turnover lines (i.e. clothing). Expansion of its market base with the capitol influx. Most companies don't make this move so they can invest more in R and D.

BD has been making products in Asia for awhile - http://207.135.152.14/china/index.php

My .02.

PT
Euroford

Trad climber
Louisville, CO
May 11, 2010 - 12:04pm PT
at first i was shocked by this news. now, perhaps i'm understanding why this could be a very good thing.

i think BD has a very solid model, they make very good, innovative and reliable gear. i buy gear from allot of different companies, but BD's gear has stood the test of time and shown itself to be a very good investment of my money, and i've never perceived of any sort of drop off in quality, quite the opposite really.

i know for example that they recently stopped outsourcing ski manufacturing and began doing it in house. this sort of thing is a huge investment, and i believe its been worth it. the new ski's are nothing short of awesome.

if they want to continue developing their product lines like that, their is no doubt that they'll need some capitol on hand. so now they got some. thats great, lets hope they do something bitchin with it.

i'm not going to get too far into the whole asian manufacturing debate.... but i'm going to go out on a limb here and take a guess that the climbing community isn't very educated about the capabilities relative to this sort of thing. but here's one good example, the new hydroformed aluminum viper ice tools, and carbon fiber cobra's. do you realize that these tool shafts cannot be mass produced in the US? there are only a handful of companies in the entire world capable of making those parts, and they are ALL based in asia. hydroformed aluminum is one very good example of this, but in a whole slew of manufacturing niche's the asians have smartly invested a TON of money into efficient advanced manufacturing that is all but unavailable in the US beyond the prototype stage.

for an interesting insight into asian manufacturing, read back through this blog entry from banshee cycles as it details the development of their "legend" world cup downhill bike.

http://bansheebikes.blogspot.com/search/label/Legend

healyje

Trad climber
Portland, Oregon
May 11, 2010 - 12:53pm PT
...but at some point the business model of great stuff manufactured by climbers only goes so far.

Why is that, and where else do they need to go? True, I suppose they could extend the brand into overpriced clothing and standup river paddleboards...
tom woods

Gym climber
Bishop, CA
May 11, 2010 - 01:39pm PT
Maybe we're looking at this all wrong. Maybe the expansion isn't into recreational users, but in Military Contracts.

Does the US military already use gregory? How about Black Diamond?

The gub'mint is where the money's at.

camo cams = bad ass.
Mr_T

Trad climber
Northern California
May 11, 2010 - 03:18pm PT
I'd be curious to see what happens to BD sales when it becomes known (truthfully or not) that BD is associated with Armour and fat Republicans. While the typical consumer can care less about where a product comes from, rich white yuppies can actually pay a few extra $ to a hippy CCH/Metolius.

reddirt

climber
May 11, 2010 - 03:28pm PT
Does the US military already use gregory? How about Black Diamond?

YES. and it's not just the US military.

edit: not even Patagonia is immune from the money of larger "government" sales. Gov't being military, not just EPA people out in the field.
lemonviolence

Trad climber
Monrovia, CA
May 11, 2010 - 03:33pm PT
The Beginning of the End.

Cheap Products and Dim Lighting is all that is left for BD.
reddirt

climber
May 11, 2010 - 03:38pm PT
Does this vertical merger make BD a larger target to sue in the event of perceived equipment malfunction (or even staged fraud) or just a larger, harder stone from which someone may attempt to draw blood from?
reddirt

climber
May 11, 2010 - 03:47pm PT
re: military

http://www.getoutdoors.com/goblog/index.php?/archives/214-ArcTeryx,-GoLite,-Camelbak,-North-Face,-Black-Diamond-and-the-Outdoor-Industry-Outfitting-the-US-War-Military-Machine.html

Thursday, December 15. 2005
Arc'Teryx, GoLite, Camelbak, North Face, Black Diamond and the Outdoor Industry: Outfitting the US War & Military Machine

War is good business. There's no denying it. Probably every sector of the U.S. economy is hungrily eyeing the $441.6 billion earmarked for military spending in 2006 - a number that represents an astounding 45% growth in spending since 2001. You'd have to be stupid or perhaps deeply principled e.g. really stupid, to ignore the potential profits a nice fat slice of the war pie can offer your business. No business or industry seems to be immune, not even *sigh, ours.

* Camelbak: Definitely the most open about selling gear to the war machine. They are the Dr. Strangelove of outdoor gear. A whole section of their site, in fact, is devoted to selling gear to military. And they are mentioned in countless articles including this one in USA Today. Not comfortable with this? Try Platypus hydration systems. I couldn't find mention of them selling to the military. But who knows.

* GoLite: Another proud supplier to the US military. Back in 2003 5% of their sales were coming from the military. I'm sure it's even more now. The same USA Today article has this fine quote, "War can be good for smaller companies," says Demetrios Coupounas, co-founder and president of GoLite. Yeah boy! Nothing like killing 30,000 Iraqis and over 2,000 Americans to really drive home some good profits.

* North Face: I don't get it. They're out there saving lives in Pakistan while at the same time they're making a tidy profit selling Met5 (you were wondering who bought them) jackets and other gear to an institution specialized in ending lives. A Time article, Troop Chic, also gushed over the industry for selling to the military. "The North Face recently added a camouflage fly to one of its expedition tents in the hope of making more military sales. In every other way, says Jill Pagliaro, a spokeswoman for North Face, “the design for Alpine athletes and military usage is similar.” I guess when you're driving profits for a huge corporation, you can't let any segment go, including the war segment.

* Black Diamond: This one hurts folks. I hold/held BD to higher standards, despite what Ultraformat has to say. But even they sell to the military according to their own site. Albeit the Austrian military. Which somehow seems even worse.

* Arc'Tryx: Another company quite proud to be selling to the machine. From their site: The Marines also needed about 200,000 units of the pack—called Improved Load Bearing Equipment, or ILBE—over four years. When the bidding dust settled, Arc’teryx had won the contract.

* Outdoor Retailer: This completely floored me this year. Among the seminars on Environmental Sustainability and Green Business Practices you had Doing Business with the U. S. Military at last summer's OR. Am I the only one who sees the absurdity of this? An industry promoting Environmental awareness at the same time it supports an industry that scars, destroys, and pollutes the environment? My head hurts.

The list goes on. Oakley, Johnson Outdoors, Oakley, Rain-Shield, Integral Designs. In fact, even if you wanted to buy gear from manufactures that don't support the war machine, you might be hard pressed to find them. I will spare you my opinion on the matter. It should be evident by now. I'll just remind my 10 readers you have a choice. And I'll remind the industry we also have a choice. The outdoor industry is not in the bomb or the gun making business. Killing, or "defense" as you might call it, are not our core business nor is it necessary for our survival. As my dear friend Albert Einstein once said, “You cannot simultaneously prevent and prepare for war.” Perhaps we could focus on the prevention side and let someone else intimately more skilled and knowledgeable work on the preparing.
___

outlets such as MooseJaw, REI all have "gov't sales" handlers.
tom woods

Gym climber
Bishop, CA
May 11, 2010 - 03:48pm PT
If the military is going to buy climbing gear, Black Diamond certainly is right up there in the best category.

Another question to ask of the great forum oracle- doesn't the military have to buy American? So wouldn't this mean that the Salt Lake factory has to stay, despite the new Chinese factory?

This may not be as bad of news as we first suspected.




reddirt

climber
May 11, 2010 - 03:54pm PT
the definition of "buy American" can get kinda fuzzy with supply chains for manufacturing & all.

Is a made-in-South-Carolina BMW or made-in-whatever-unionless-southern-state-with-many-American-parts Toyota buying "foreign"?
healyje

Trad climber
Portland, Oregon
May 11, 2010 - 04:29pm PT
This could actually be the silent inspiration for it all...


Just a little something that goes well with their Ruscha...
healyje

Trad climber
Portland, Oregon
May 11, 2010 - 04:47pm PT
And bottom line, this guy now makes your cams...


bit of a change from this guy...

stevep

Boulder climber
Salt Lake, UT
May 11, 2010 - 05:12pm PT
If they are going to maintain ISO and Six Sigma standards, it shouldn't matter too much who owns the company.
It's true that more money may go to foreign workers and more money to investors, and less to climber employees. And that's not necessarily a good thing.
But I don't know that absolutely equates to a decrease in quality. If anything, I'd say it's more likely that R&D would get cut to save money.
scuffy b

climber
Where only the cracks are dry
May 11, 2010 - 05:12pm PT
But, Joseph, YC has been out of it for more than 20 years, right?
Oneoff

climber
May 11, 2010 - 06:28pm PT
It amazes me how casually most readers seem to have reacted to this acquisition. Its not just that the industry leading climbing safety equipment manufacturer has been acquired by a war profiteer -- its that this particular arms merchant has a track record of delivering defective safety equipment and has demonstrated extreme callousness towards soldiers' mortality when measured against his bottom line. Are the implications of this too difficult for many climbers to understand or are they merely in permanent thrall to the power of the Black Diamond brand name.

On the first point, the new Executive Chairman's former company paid a $30 million dollar settlement after it was investigated by the Department of Justice and the military for selling defective body armor for use in Iraq and Afghanistan. The body armor procured by the government was crap, our soldiers knew it, and they routinely solicited family members to purchase bulletproof vests at their own (significant) expense and ship them to Iraq so that they would have something more substantial than heavy GI cardboard to protect them from enemy fire.

On the second point, the new Executive Chairman's former company was responsible for the "armoring" of the humvee vehicles which so often proved to be death traps for soldiers in Iraq and Afghanistan. After being criticized by the military for delays in provisioning vehicles, the company refused a blank check from the Pentagon to license a third party to manufacture and install armor using the approved design, and they used lobbyists and pulled favours to make sure other alternative designs were not approved in its place. The pentagon said "name your price" and they said 'no thank you, we prefer to maintain our status as a monopoly provider, let the soldiers eat cake'

Here is how the New York Times described this exchange:

The Defense Department continues to rely on just one small company in Ohio to armor Humvees. And the company, O'Gara-Hess & Eisenhardt, has waged an aggressive campaign to hold onto its exclusive deal even as soaring rush orders from Iraq have been plagued by delays. The Marine Corps, for example, is still awaiting the 498 armored Humvees it sought last fall, officials told The Times.

In January, when military officials tried to speed production by buying the legal rights to the armor design so they could enlist other venders to help, O'Gara demurred, calling the move a threat to its "current and future competitive position," according to e-mail records obtained from the Army....

Determined to hold onto its exclusive contract, O'Gara began lobbying Capitol Hill. Among those it drew to its side was Brian T. Hart, an outspoken father of a soldier who was killed in October 2003 while riding in a Humvee. Early last year, as a guest on a national radio show, Mr. Hart urged the Pentagon to involve more armor makers. Two weeks later a lobbyist for O'Gara approached him.

"He informed me that the company had more than enough capacity," Mr. Hart says. "There was no need to second-source."

Mr. Hart then redirected his efforts to help the company push Congress into forcing the Pentagon to buy more armored Humvees. With support from both parties, the company has received more than $1 billion in the past 18 months in military armoring contracts....

Meanwhile, the Army did not give up on trying to speed production by involving more armor makers. Brig. Gen. Patrick O'Reilly said several armor companies were eager to be part of a plan to produce armored Humvees entirely on AM General's assembly line.

In January, when it asked O'Gara to name its price for the design rights for the armor, the company balked and suggested instead that the rights be placed in escrow for the Army to grab should the company ever fail to perform.

"Let's try this again," an Army major replied to the company in an e-mail message. "The question concerned the cost, not a request for an opinion."

The Army has dropped the matter for now, General O'Reilly said, adding that he hoped to have other companies making armor by next April.

Asked why the Marine Corps is still waiting for the 498 Humvees it ordered last year, O'Gara acknowledged that it told the Marines it was backed up with Army orders, and has only begun filling the Marines' request this month.

All of this is terrible, terrible news for climbers. What we lose is not merely any sense of confidence in one of the largest equipment manufacturers, we lose an important quality bar that every other manufacturer worked to measure up to and a major source of innovation in our sport. Outside of soft goods, this company is now dead. You may buy their products at your peril and if you're lucky they will function well, but if it happens to be the quarter that they need to stuff the channel and flip the company to a new owners, well, like american troops, you may end up a casualty of their greed....

I imagine the R&D folks and sponsored athletes are taking it very well. What could make them happier than making new ascents and developing new tools to conquer mountains as the paid servants of a princely arms merchant, a procurer of death.

[Edited for type-o]
tom woods

Gym climber
Bishop, CA
May 11, 2010 - 06:51pm PT
We shall see - if quality suffers and jobs are shipped overseas.

That would seem to be a possibility.

I'm sure he's a typical rich guy too- hates the government in every way except as his biggest customer, but in the end it's actions that matter not belief or words.

If quality suffers, climbers laid off, and R and D ditched to increase the bottom line, than we'll know.

That being said, if I had money, I might buy a new set of camalots before we find out one way or the other.
miwuksurfer

Social climber
Missoula
May 12, 2010 - 12:18pm PT
I think this is still front page news.
Ain't no flatlander

climber
May 12, 2010 - 01:29pm PT
Good news for other climbing companies. It's a safe bet Metcalf will be gone in 3 years (the standard length of contracts in these cases). But there will likely be a lot of management turnover prior to that and it will accelerate after he leaves. BD gear will still be okay for another couple years. Then the financial thumbscrews will start to turn for higher profits. First to go will be the niche categories that lose money (aid climbing, telemark, Bibler). The Gregory brand will go away in 4 years (a la Dana being swallowed by Marmot). Then of course the inevitable expansion of lifestyle clothing, sunglasses, and watches with high margins. The company will be sold off, likely in pieces, within 5 - 7 years. All hardgoods will be discontinued in about a decade because there isn't enough profit and the AT ski fad will have run its course.

Metolius has been for sale for years with no takers. Likely someone will now purchase them and Trango, perhaps what's left of CCH, and pick up more market share--smart move. Petzl will keep expanding and acquire a few more brands before being bought by a mega-brand (Amer Sports perhaps). Mammut has the power of it's huge parent company to steamroll along. Meanwhile CAMP is still owned and operated by the 4th generation and appears to be reinventing itself as a high-end brand.
Mazzystr

Gym climber
Homeless...
May 12, 2010 - 04:54pm PT
I'm glad I have triples of C4's up to #6.

I'll never buy another BD product again.

/Chris C
healyje

Trad climber
Portland, Oregon
May 13, 2010 - 03:57am PT
As I said, as far as I know Metolius has only responded to inquiries - they've never been put on the market.
Crag Q

Trad climber
Louisville, Colorado
May 13, 2010 - 09:46am PT
OK, I am sufficiently put off by this purchase now.
Euroford

Trad climber
Louisville, CO
May 13, 2010 - 10:29am PT
this thread is awesome.

i love the paranoid war mongering spin. i'm SURE that what this is all about!!

nevermind the fact that their appear to be a bunch of very legitimate reasons why this is a sensable step in BD's growth strategy. it might entail some risk, and it might and/or might not work out to BD's and/or the consumers benefit, but if they want to continue to grow the company its a bridge to be crossed and its then going to be up to them and us to see how succesfull it is.

BD is a clear market leader, the strategery all makes sense.
Josh Nash

Social climber
riverbank ca
May 13, 2010 - 10:44am PT
My worthless two cents: someone previously pointed out about increase in softgoods. I think gear will take a back seat to sell a lifestyle to the masses. Look at the surf industry. Surf shops used to sell surfboards with a few t shirts in the back. Now it's r shirts with a few surfboards in back.


Edit: arctyrx is a war mongering govt contractor. They sell packs and layering to the Marines and no one is bashing them.....
Euroford

Trad climber
Louisville, CO
May 13, 2010 - 10:58am PT
i think if i was a marine, i'd be stoked to have sweet arcterx gear. i think its awesome that somebody has the sense to provide the solders with that quality of equipment, and extra sweet that our industry can bolster its coffers by providing to the military.

i'm sure we will see an expansion of bd's softgoods line. this is probably a good thing.

i don't expect to see bd drop out of the hard goods market, i expect them to expand it. one of the reasons why they appeal as a business investment is because they have secured a highly desirable position in a nitch market where they are able to command premium prices for gear.
Dolomite

climber
Anchorage
May 13, 2010 - 11:06am PT
It's natural for businesses to sell out. And it's natural for businesses to do business with the military. I just don't want to buy climbing gear from a guy who sold DEFECTIVE armor to the military. Do you?
murf02

climber
NYC
May 13, 2010 - 11:48am PT
To much speculation on this thread. For the first time in BD's history consumers will have access to BD's financial statements and SEC filings. Becoming a public company is not necessarily jumping the shark. Only time will tell. BD branded perfume could make one wish for the Happy Days of old.
klk

Trad climber
cali
May 13, 2010 - 12:12pm PT
The outdoor industry has long history of involvement with the military. Perlon, vibram-soled boots, down parkas, even US-manufactured pitons, were all either developed or spurred by military capital. I wouldn't fret too much about a major supplier finding military contracts-- they all do. If you only buy gear from folks who won't sell to the military, you'd better be ready to climb naked.


But this is a sport and a community where reputation is supposed to mean something. You don't take North America's most storied and respected hardware concern and yoke it to a fat cat roll-up artist best known for running a war-time monopoly on defective military goods.

Remember, this company started with an anvil, a hammer and a picnic bench in the Tetons, Yosemite, and wherever else Yvon parked his truck. From RURPs to the curved-radius ice axe, Chouinard was one of the most important makers of the 1960s and 1970s.

Now, that heritage will be forever linked to the hillbilly armor scandal.


Euroford

Trad climber
Louisville, CO
May 13, 2010 - 12:25pm PT
okay, i'll go put my tinfoil hat back on and pretend that the sky is falling.

this is a fun thread though.
healyje

Trad climber
Portland, Oregon
May 13, 2010 - 01:21pm PT
Whatever else, these guys are smart guys - they'll be all about effectiveness (increasing revenue) and efficiency (decreasing costs) on one hand and rolling up more acquisitions to round out their outdoor portfolio on the other now that they've pulled the trigger. BD and Gregory by themselves are a bit 'thin' as portfolios go; together they barely get them over the $100m line where it all becomes worth the hassle. Coming from the pond they're used to playing in I'd expect they probably plan on rolling up something more like a $150-300m portfolio in short order while the getting is good.

And given these guys have fed/mil procurement down cold it's a good bet that they view cranking up mil contracts as a sure way to easily double their revenue with relatively minor product changes. The concern is really more about how strong / reckless their drive for efficiencies become. Guys like these don't like be pinned down, dependent, or constrained by - and don't tend to be particularly loyal to - anybody on the supply side. We'll have to wait and see how it goes, but you can imagine how bad it could get if they decided to go out for few drinks to listen to a pitch about 'cheaper, faster, and more reliable' sourcing from any of the extended Mad Rock crew...
reddirt

climber
May 13, 2010 - 01:39pm PT
I think the smaller Black Diamond got some sort of cease/desist action taken against them... or read something to that effect years ago.

http://www.sierratradingpost.com/Black-Diamond-Sportswear.html
Dolomite

climber
Anchorage
May 13, 2010 - 01:57pm PT
healyj, I'm sure your business analysis is reasonably astute. But where I disagree is when you say, "The concern is really more about how strong/reckless their drive for efficiencies become."

My concern is different: I don't want to support a climbing equipment business run buy a guy with no principles (other than profit) and no climbing roots.

Kerwin said it more eloquently above.
healyje

Trad climber
Portland, Oregon
May 13, 2010 - 02:06pm PT
Dolomite, I wasn't speaking to any moral imperatives in that analysis, simply pointing out the potential for quality issues once Metcalf & Co. hit the doors. Everyone has to make their own call about who they buy gear from. Pretty easy one for me - I buy from the climbers who make and use great gear and live just a stones throw away on the other side of the mountain.
tom woods

Gym climber
Bishop, CA
May 13, 2010 - 03:11pm PT
Healyje- you're analysis seems about right, they gotta sell more or squeeze saving out of something. The Metcaff guy will be gone in a few years time after assuring continuity.

It's really a wait and see on the gear.

Is it necessary that the owner of a climbing/skiing business be a climber or skier, no- but I would think that it would help.
rockermike

Trad climber
Berkeley
May 13, 2010 - 06:06pm PT
Does anyone know the full history behind the Chouinard to Black Diamond transaction? I know a lawsuit was involved but not much more. Was Metcalf one of the original owners of Chouinard Eq. or how did he get involved. And, who actually owned BD (as of a week ago)?

Of course there is always class stratification in businesses, but it can sort of be overlooked while small and privately owned. I suspect one person (or a few??) are going to make out big here, buy mansions, private planes, and yachts (or whatever shakes their bootie), while the rank and file are going to have their actual peon status highlighted. Sad, but that's the way our world is structured.
hoipolloi

climber
A friends backyard with the neighbors wifi
May 14, 2010 - 02:37am PT
buy Metolius now...
GDavis

Social climber
SOL CAL
May 14, 2010 - 02:44am PT
Boycott them.
climbera5

Trad climber
Sacramento
May 17, 2010 - 04:10pm PT
Keep in mind that Kander holds a large loss carryover that can be used to offset profits from a potential cash cow. A win-win situation at first blush. Speculation abounds here and there are a lot of good reasons set forth as to why it’s a good or bad idea.

Should Metcalf have sold his soul or be naively taken in by Kander and BD is taken to the dark side, they will certainly lose favor with the climbing community. That may not concern Kander in the short term. If he’s able to leverage BD’s name for DOD contracts and mass marketing/ distribution in Asia and Walmart, then he’s achieved his short term goals through stock appreciation. We can only pray it is not so.

Either way, if BD loses its reputation and/or quality control then others will step into the void. The talent, need, and inspiration will remain and someone else will eventually benefit.
miwuksurfer

Social climber
Missoula
May 19, 2010 - 03:58pm PT
http://www.justice.gov/opa/pr/2008/October/08-civ-901.html


Apparently, if you give the government $30 million you can do no wrong...

I'm looking forward to these guys making my climbing helmet.
healyje

Trad climber
Portland, Oregon
May 19, 2010 - 04:51pm PT
To be fair to Kanders, the defective vest were made by Second Chance, inc. and Kanders' Armor Holdings scooped them up in August 2005 two months after the National Institute of Justice declared the vests defective in June 2005.
alpinist-erik

Mountain climber
Jackson, WY
Jun 10, 2010 - 04:39pm PT
Backcountrymagazine.com has posted a story/interview with the BD ski category director. Interesting perspective:

http://www.backcountrymagazine.com
EdBannister

Mountain climber
CA
Jun 10, 2010 - 04:43pm PT
Gregory has changed hands so many times in the last six years it blurs the vision... bianchi, then somebody else, then a year or so ago Wayne moved and they left the long time Temecula location for Sacramento... only to be bought again???

whew.
rockermike

Trad climber
Berkeley
Jun 10, 2010 - 04:50pm PT
-^^^^^^^^^^^-
Sounds like hype to me. Of course they are going to say that - they are required to minimize any damage the buyout would do to their reputation amongst once loyal customers. Reality may, or may not prove this vision true but just because they "says its so" doesn't mean squat. Their obligations are to the shareholders hence forward.
Toker Villain

Big Wall climber
Toquerville, Utah
Jun 10, 2010 - 05:06pm PT
Boycott BD
the kid

Trad climber
fayetteville, wv
Topic Author's Reply - Jun 10, 2010 - 06:22pm PT
no one needs to boycott BD or Gregory.
But this is just another alarming trend in our "quaint" little industry.
which is not so little nor quaint any more.

There are fewer and fewer independent, small companies in the outdoor biz. This trend started with VF buying the north face and many others along the way.
Columbia owns Montrail and Mountain Hardwear.
the list goes on and on..

part of the game i guess.
ks
Mighty Hiker

climber
Vancouver, B.C.
Jun 11, 2010 - 02:47am PT
Black Diamond, and its predecessor Chouinard Equipment, has been making generally excellent equipment for climbing and mountaineering for more than 50 years. The company has also been a strong supporter of its community. It's understandable that some climbers might be concerned as to what will happen to a company which has earned their loyalty and trust, and has such a history. At the same time, the world does sometimes change. The current owners/managers have been in place for nearly 20 years, of constant challenge, innovation and growth - notwithstanding globalization and economics. They couldn't continue forever.

It is right to be concerned about the future, but the company has very strong roots and culture. I doubt there'll be any significant change any time soon, if at all, and wouldn't jump to conclusions quite yet, notwithstanding the value-less desolation that publicly-traded corporate America can sometimes be. I hope the company continues on the course it long ago set and does not compromise its values, and thank the 'outgoing' owners for all they've done for climbers and the climbing community.
apogee

climber
Aug 22, 2011 - 01:38am PT
Wrenan = spambot

(See profile>forum posts)
wildone

climber
Troy, MT
Aug 22, 2011 - 01:41am PT
I want to know who the asshat is that sued Chouinard not for making defective equipment but for not warning them that climbing was dangerous, thus causing the bankruptcy
OR

Trad climber
Aug 22, 2011 - 09:00am PT
^^ It was a guy from a Texas oil family if I remember correctly. Very wealthy^^
wildone

climber
Troy, MT
Aug 22, 2011 - 10:30am PT
A Texas dickface family by my estimation. Fortuitous for the employees biting the hand that feeds them too.
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