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.
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!
sos

Trad climber
nyc
Aug 13, 2014 - 04:44pm PT
QITNL: Gregory was sold off to raise cash to fund the retail expansion strategy, pay down debt, and cover a stock repurchase program designed to defend the stock price.

Bad Climber

climber
Aug 13, 2014 - 05:34pm PT
What Donini said. Sounds like a sad, stupid choice of CEO. I wonder if there was any way BD could have stayed private and not beholden to stock holders? Seems like that path can ruin a lot of cool businesses. Folks see $$, over reach, and fall into the drink like Icarus. Oh well. I love my Camelots, but I'm more inclined to go with Metolius these days cuz they's made in the UsA.

BAd
apogee

climber
Technically expert, safe belayer, can lead if easy
Aug 13, 2014 - 07:09pm PT
Good riddance.

Maybe the void will be filled by quality climbing gear.
Studly

Trad climber
WA
Aug 13, 2014 - 07:15pm PT
Perhaps they will be getting out of the cam business as well. The hand writing is on the wall with the Totem cams, if BD can't come up with a superior product. I still love my BD cams though, not knocking em.
donini

Trad climber
Ouray, Colorado
Aug 13, 2014 - 07:23pm PT
Dudes....It's always easy to criticize the big guys but, face it, BD makes exceptional climbing gear. Come to Indian Creek, the most cam extensive climbing area on the planet, and you will see 90% camalots.
stevep

Boulder climber
Salt Lake, UT
Aug 13, 2014 - 08:58pm PT
And while I know there are a couple folks here who have a few beefs with Metcalf on a personal level, and who also may not like some of the outsourcing to China, Metacalf has been a huge advocate for outdoor recreation here in UT.
healyje

Trad climber
Portland, Oregon
Aug 13, 2014 - 11:11pm PT
Chouinard / Patagonia and North Face basically got out of the game and got big on softgoods, no surprise BD's going to follow there lead now it's in the hands of those folks.
Toker Villain

Big Wall climber
Toquerville, Utah
Aug 14, 2014 - 07:02am PT
Yeah Steve, I've got a beef with him.

He is a liar.

They are only "principles" if you stick to them when it is not convenient.
He is a four flusher willing to sell out his own people.


But I agree with Yvon, and I'm glad I got to climb in the '60s and '70s when things were so dynamic and interesting. Hell, I even shared a spot in C4 with Peter (I trusted a lot more people back then).
John Mac

Trad climber
Littleton, CO
Aug 14, 2014 - 07:04am PT
I don't know why people are so harsh on BD climbing gear. It's good stuff and well made. Sure, I have a couple sets of totems for aid climbing, but I still use my C4's for everyday stuff.

BD is now a public traded company and they have to keep their shareholders happy, so no one should be surprised by this move. If they stop making ledges, etc., it will just provide more opportunities for the small fish...

miwuksurfer

Social climber
Mi-Wuk
Aug 21, 2014 - 03:06pm PT
This is not surprising but kinda sad.
rgold

Trad climber
Poughkeepsie, NY
Aug 21, 2014 - 04:20pm PT
So whadya think guys, should I be stocking up on Ultra Distance Carbon Trekking poles? Ain't nothin' better for climbing approaches and trail running...

Not exactly cheap now but I'd rather not see new ones on ebay for $1000 'cause they're no longer in production.
miwuksurfer

Social climber
Mi-Wuk
Aug 21, 2014 - 05:20pm PT
Or a crash pad...
sandstone conglomerate

climber
sharon conglomerate central
Aug 30, 2014 - 06:57am PT
Is everything BDE makes now made in China? I bought a new locking biner, proudly made in China.
Charlie D.

Trad climber
Western Slope, Tahoe Sierra
Aug 30, 2014 - 08:03am PT
DMT speaks the truth....


Aug 14, 2014 - 04:21am PT
It will spawn new innovation if BD gets out of the climbing business. It will spawn new US business. Maybe the former engineers and designers at BD can start their own company... call it The 100% U.S. Climbing Gear Company.

DMT

ps. please do not sell thru REI.

Leaders like PM don't grow on trees, it will be interesting to see what he does following his legacy at BD. He's certainly signed a non-compete clause that will be in effect as he departs, what BD doesn't retain will be fair game for PM and the many engineers and innovators at the company.
OR

Trad climber
Aug 30, 2014 - 08:46am PT
Good god……anybody remember when TNF started making jeans and leather jackets in the early 90's? Awful. I hope BD does not suffer the same fate.
Largo

Sport climber
The Big Wide Open Face
Aug 30, 2014 - 10:15am PT
The BD brand's strategic direction seems to be the growth of softgoods


Makes sense that if they are bringing on a cloths dude from the Gap to run things, clothing will be their mainstay. But I fear the market won't sustain them. How many different ways can you spin a Gortex parka?

JL
Srbphoto

climber
Kennewick wa
Aug 30, 2014 - 09:02pm PT
Makes sense that if they are bringing on a cloths dude from the Gap


jstan

climber
Aug 30, 2014 - 09:13pm PT
Just one big suit and award for a costume failure and we will once more be up to our chins in climbing hardware.
Jon Beck

Trad climber
Oceanside
Aug 30, 2014 - 11:38pm PT
I agree with Largo, it is all about fashion. I am humored when I travel to Boston and every other person on the subway is decked out in TNF gear. What a racket that company has going. You don't see it as much out here with the warmer weather, but I have seen friends go out and drop 400 bucks on a TNF jacket to take a short trip somewhere marginally cold.

It is hard to squeeze growth out of the hardware market, all they can do is poach from other gear companies customer base. Clothing has way more growth potential.

Problem BDE has is they are over the top on pricing from what I have seen (promotions they have sent me, maybe Amazon/Ebay is cheaper?) and there are a lot of upstart companies with some equally good gear who are very competitive.
Gnome Ofthe Diabase

climber
Out Of Bed
Jan 30, 2015 - 12:45pm PT
bump
snikker,
Got milk?
Low T?
I absolutely must show my appreciation,This and that the soft goods have lasted better than some other brands and the Hard ware, while less so now was the cutting edge for years.
I hope the change at the top is good for the brand Pete Metcaclf, was always approachable
And that was special, and will be missed.
Lorenzo

Trad climber
Oregon
Jan 30, 2015 - 12:53pm PT
So, is there going to be a hardware spinoff?

That's how BD got started in the first place.
Elcapinyoazz

Social climber
Joshua Tree
Jan 30, 2015 - 01:46pm PT
It's cute that some of you actually believe modern corporations have a fiduciary duty to their shareholders. In theory? Sure. In practice? Hahahahaha!!111!1

I'm really going to enjoy hearing the explanations of how $10+M salaries and golden parachutes for c-suite execs, who as often as not are complete failures who destroy the company in the process, meets that standard of duty to the shareholders.

WBraun

climber
Jan 30, 2015 - 05:41pm PT
They can sell lots of clothing.

All you need is that justin beiber teeny bopper dude to model your stuff.

Then all those stooopid kids will buy your junk .....
kunlun_shan

Mountain climber
SF, CA
Jul 16, 2015 - 05:30am PT
According to the article below, which I found on wildsnow.com, BD is being sold again:

http://www.streetinsider.com/Analyst+Comments/Canaccord+Genuity+Remains+Bullish+as+Black+Diamond+%28BDE%29+Enters+Final+Stages+of+Sale+Process/10715278.html
mouse from merced

Trad climber
The finger of fate, my friends, is fickle.
Jul 16, 2015 - 06:32am PT
How's "all this" gonna affect their sponsorship of the Yosemite Facelift?

Wait and see, I guess.

Ken Yager, know anything about that?

I sure like the BD key-ring/horizontal/bottle opener they handed out last year. It's not that great at any of the three tasks, but was a nice gesture.

Is Zeena related to Luke?
Or is that just a fluke?
Matt's

climber
Jul 16, 2015 - 07:24am PT
FYI-- all BD hardgoods are apparently being made in the US again...

you can see the new cams here

http://mountainproject.com/v/new-cams/110700996


Spiny Norman

Social climber
Boring, Oregon
Jul 17, 2015 - 05:16pm PT
I really wonder what motivated the decision to move production back to the US. My guess: near-identical knockoff gear emanating from some of the same sources but without the same levels of QC.
Scott McNamara

climber
Tucson, Arizona
Oct 6, 2015 - 06:41pm PT
It appears Metcalf is not stepping down---for the moment:

http://www.snewsnet.com/news/black-diamond-inc-president-zeena-freeman-resigns-over-pending-sale-of-company/

Really interesting (mostly climbing related) interview with him at ENORMOCAST:

http://enormocast.com/episode-90-peter-metcalf-big-peaks-and-high-stakes/

Gnome Ofthe Diabase

climber
Out Of Bed
Oct 6, 2015 - 09:59pm PT
Thinking that the 30+ year old Son Of Crag pack had stood up so well,
And that given some doom and gloom from this thread. . It made me think that the quality of
BD products might suffer .
So after a comment from a young climber; saying that he thought there was a picture of his grandmother wearing the same pack,
and then when I Next talked to him to plan to go back and finish what we started,
he said that it was his grandfather 's pack
and his grandmother had a matching black and purple one (smaller, daughter of crag?).

I pulled the trigger and bought a new BD Stone 45 'rope bag'
The thing is a piece of shjt. It has no full strength anything the grab loops AND the tool loops
are ribbons barely sown into the trim

They alone are Criminally Negligent !

The pak is not fully lined and the bottom has some sort of two cents crap fiber,
(Instead of an ensolite type pad)
permanently sandwiched Between the only 3 inch up the bag bottom.

leaving a seam running at the highest friction /Rub point, where the pack rides on your hips is a dirt magnet seam.

Then it has an un-protected zipper on the out side face of the pack off center, but no Velcro
storm flap when it needs 2 - one inside providing a gasket to stop dumpage and a full length, fully
Velcro'd, water proof storm flap on the outside. one only has to try the pack on to know it is a piece of junk.

When I called to tell them they told me it was not a climbing pack??
The designation of'Rope bag" disappeared from the web site and my ability to post reviews was blocked
RIP to what has been my decadent source of over priced gear , I could not justify retail prices
Back when I climbed every day, Now that I get out much less and never go far
I can't afford gear that is made to fail .
k-man

Gym climber
SCruz
Oct 7, 2015 - 08:36am PT
Time for Yvon to restart his blacksmith shop. Pitons by BD will be rare items, it seems.

Maybe they'll by the old EB factory and start making shoes. Anybody up for a Climbing Clog?



But, finally it looks like somebody decided to tackle the trigger-wire problem. This looks cool:

k-man

Gym climber
SCruz
Oct 7, 2015 - 08:42am PT
When I called to tell them they told me it was not a climbing pack??

Gnome, sounds like you bought the Rope Bag online, before inspection.
+1 for what Dingus said, but likely too late now to return it.
Sometimes you get great deals online, other times you pay the price.
Fat Dad

Trad climber
Los Angeles, CA
Oct 7, 2015 - 08:53am PT
I am humored when I travel to Boston and every other person on the subway is decked out in TNF gear.
If they do it in Boulder or Seattle without comment, then why not Boston. I had to go to Boston in March, and though I didn't see anyone in an outdoor brand jacket, I sure wish I had brought mine with me. I wouldn't have been so cold. Tourist.
haleyd

Trad climber
SLC
Oct 8, 2015 - 07:45am PT
+1 for what Dingus said, but likely too late now to return it.
Maybe, maybe not. Retailers are people too. I'm guessing BD will work with you.

Don't call to complain though. Don't be lecturing them on the shitty quality or lack of utility. Rather, express your disappointment that the product does not fulfill your needs. Try to work to a solution. Even if they won't refund you any cash, or give you full credit, politely insist on satisfaction. But don't threaten them (I'll never come back if you don't do x...) - that is totally ineffective.

Maybe a different pack or some other article, if you've already used the rope bag a bit you cannot expect a full refund. Work to a solution, rather than bitch at them, and I'm guessing they'll meet you more than half way.

DMT

I work next to the lady that Gnome spoke with. Telling the customer service rep that she's a piece of sh#t and making her cry usually doesn't bode well in terms of them wanting to help you out.
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