Credit - Q&A: Mountain Hardwear’s Mike Wallenfels on the Evolving Business Model

For a look at what a new business model for the outdoor industry might look like, CEO Brief posed some questions to Mike Wallenfels, president of Mountain Hardwear and Chairman of the Outdoor Industry Association Board or Directors. Below are excerpts from his responses:
Q: How would you see vendors’ terms changing under a business model in which brands are breaking up business into four or five production runs and delivery periods throughout the year? A: There would be three tiers under what retailers would buy from. Continuous replenishment of year-round product that would carry 30-day terms at set prices providing reliable margin to the retailer, these transactions are not driven by discounts and dating. For seasonal product sold twice a year, we should operate on a moderate discount range with extended dating offered for appropriate categories such as ski apparel and equipment and offer the ability to reorder. For seasonal collections, I see higher discounts as an incentive for four or more product offerings a year that would liquidate after 60 to 90 days in store.

Q: How do you envision this affecting the brands’ and/or retailers’ ability to chase business when a popular style emerges? A: For 12-month and seasonal products there is no change and meeting demand should still be expected. For the 4x product assortments, this is truly collection selling and a rapid sell out is a win for everyone and any reorder would be unplanned. A wholesale brand could decide to offer a key mover again the next season or year. Hopefully we keep coming up with new winners each time. Again, this is the exception and not the rule.

Q: How would the hard goods business fit into this new model? A: Equipment should fit into the replenishment model with retailers picking their styles in the spring for camping and climbing gear. Initial orders are shipped with retailers supplying projections of sales with B2B systems used to keep product in stock. Wholesale brands benefit here when they get to see in season sell-through on their products and retailers manage lower inventories with faster turns. However, this does not work if there is not a mechanism in place to make it happen. Currently we rely on large shipments two times per year with reorder in between orders to stock retailers. Wholesale brands are willing to invest in the appropriate systems if the retailers can get up to speed.

Q: Why not just bring more apparel and/or footwear production back home to reduce lead times? A: The factory base in casual and performance apparel is NOT here. We can make T-shirts and smaller runs of knit products, but stylized apparel, rainwear, and technical equipment are out of the question. If there were factories available, we would have a rude awakening to the prices that we would see compared to Asia. I do believe that there will be growth in domestic production as time goes on, but it will take some time, investment, customs changes and price acceptance.

Q: Why change the model for a temporary financial crisis? Won't things just go back to normal when the financial crisis ends? A: Banks and brands will all require assurances that these issues cannot happen again. Currently, the retailer can cancel any product at any time, but the wholesaler cannot. This leaves a large amount of inventory that still has yet to find a home in 2009. Good business practice will show that we need to change on some level. I also believe what many say will be a lasting change in consumer buying habits. How extensive it will be is yet to be seen, but caution will be the rule in the supply chain going forward.

Business Plan - Outdoor Foundation Report Finds Participation

Initial data from the 2009 Outdoor Recreation Participation Topline Report, published by The Outdoor Foundation, shows that an increasing number of Americans participated in nature-based, outdoor activities last year. The study finds sizeable participation increases in many nature-based activities including double-digit increases in backpacking, mountain biking and trail running and close to a ten percent increase in hiking and camping. Overall participation trends in recreation, sports and fitness remained largely unchanged from last year.

“Americans are finding solace and security, adventure and excitement in the great outdoors,” said Christine Fanning, executive director of The Outdoor Foundation. “During these challenging economic times, a return to affordable, nature-based recreation allows individuals, friends and families to reconnect – with one another, with the natural world and with natural values.”

The Outdoor Foundation 2009 Outdoor Recreation Participation Topline Report also shows increases in many active outdoor activities among youth, showing a positive trend from 2008 in some key areas. Biking, backpacking and hiking are just a few of the activities that show increases in participation among young people. Overall, outdoor participation for youth ages 6 – 12 is down 7.6% from last year, showing a continued need to focus on connecting kids and nature.

“It is certainly encouraging to see an increase of youth participation in some important recreation categories, but more must be done,” continued Fanning. “Public and private partnerships, effective outreach programs and creative campaigns must be top priorities for every sector of society if we are to truly inspire and grow the next generation of outdoor enthusiasts.”

Retail sales information from Outdoor Industry Association supports the assumption that more Americans are participating in nature-based outdoor activities. The Outdoor Industry outperformed many other industries in 2008, with a 5% gain over 2007.

The Outdoor Foundations 2009 Outdoor Recreation Participation Topline Report details Americans' participation in outdoor activities from 2007 to 2008. The Report is a high level overview of The Foundation's full Participation Report, which will be released later this year with expanded data and full analysis.

A copy of the 2009 Outdoor Recreation Participation Topline Report along with the 2008 Outdoor Recreation Participation Report can be downloaded from The Outdoor Foundation website at outdoorfoundation.org/research.

Brian and Bob on Park City TV explaining how they met, the creation of their "guy", and their environmentally cool vision.

05/18/2008 09:00

Hello Friends,

A quick post of Brian and Bob with our friend Emily from Backcountry.com explaining our vision at Park City Mountain Resort.

Have a great day!
Brian