BDE Quarterly report: Metcalf stepping down in 2015

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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.
Jim Brennan

Trad climber
Canada
Aug 11, 2014 - 06:48pm PT
Peter Metcalf was prominent in many Alaskan alpine adventures if you are old enough to have lived in the times when Mountain Magazine out of Britain and Climbing magazine under the review of Michael Kennedy were the best and only way to get information about what was going on.

You only live once and not so long. If the money's in nice short sleeved shirts and not badass portaledges, that's just time moving on.

The quality and utility of climbing equipment is truly unbelievable these days. Black Diamond is responsible for kicking the traditionally slack European manufacturers into paying attention.

We will all see what's next...

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.
gf

climber
Aug 12, 2014 - 01:41pm 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.
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.

Dave Kos

Social climber
Temecula
Aug 12, 2014 - 02:57pm PT
What does this mean?

Will the classic "D" 'biners I got back in 1991 still work?
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
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