Catching up with Outdoor Tech CEO Caro Krissman
The last time we checked in with emerging brand Outdoor Tech at January’s SIA Snow Show, the company had just engaged Wunderlich, a capital financing company, to go over several options to restructure some of OT’s expenditures as a way to better plan for the next 18 months. CEO Caro Krissman was quick to tell us that this restructuring did not include another round of investment, although the business has been in talks with several equity groups over the past few months and “are weighing options for a potential growth capital round for Q1 16,'” he explains.
By partnering with Wunderlich, Outdoor Tech has been able to refinance a higher rate debt, gain access to meaningful capital, and avoid dilution. Meanwhile, the business has nearly tripled sales from 2013 to 2014, and is on pace to more than double its sales 2014 to 2015, says Krissman. He attributes much of the anticipated growth to stronger pre-books and new helmet partnerships. The Los Angeles-based company has also made several key hires, allowing them to fuel growth in distribution and product innovation.
“My role has been changing from the perspective that we have gone from 3 to 21 team members in the last 32 months which means a greater management role, more delegation, and driving results rather than being in the thick of every project, marketing piece, product development and sales call,” explains Krissman.
From a marketing standpoint, OT continues to crank on a creative level and seems to have held on to the flexibility of a start-up tech company.
“One of the things that makes our brand different is that we didn't come from CE, we aren't owned by a CE company, and we don't speak like a CE company,” says Krissman. “We are an outdoor lifestyle brand that has CE products— that's not changing.”
Krissman assures that its followers will see no change in it’s historical “willingness to push the envelope,” with the first sign of verification to that statement being an Agenda Show party next month, hosted by Outdoor Tech and featuring an inflatable gladiator ring. The party will help raise breast cancer awareness. We heard more from Krissman about the state of the outdoor electronics business from his perspective.
At the product level, what are a couple new tech advancements that you are particularly hyped on for next season? Even if you can give us a few hints here, that might be a cool teaser for our audience and get retailers hyped.
Helmets have been a strong point for us. We are now expanding out of just snow into bike and beyond. Lighting with the Buckshot Pro has been received very well and we have planned growth in this area. We also have a number of software integrations in the works.
From a retail standpoint, what is your distribution strategy moving forward? Are you trying to open new doors, grow in the doors you are already in, target any specific new markets outside the US?
Both. We are still in hyper growth, but we are not ignoring doors we have. There is huge growth opportunities to expand productivity in doors that are already active and performing well. Our line has grown significantly and while most doors are not carrying the full line—not all doors should—there is a formulaic assortment we have given the vertical. Our goal is to place the right assortment that fits the door/vertical. Where appropriate we have great success with doors that are carrying the full line— POP, and all. It helps tell the story and is far more impactful than a couple SKUs on a peg.
We are also aggressively growing doors. We are up to 2750 in N. America. International is growing well, though less predictable. Good news is sell through is extremely strong and growth is primarily coming from re-orders, not just load in orders.
What does your existing distribution look like domestic v. Int’l? Do you use third-party distributors Internationally and if so any big changes or tweaks you are planning to make?
Our 2015 forecast has about 16% international. We are holding true to that YTD. We use distributors for our international business. One big change was the closure of our Hong Kong DC which will occur by the end of June. It became too costly and with the choppiness of the international business and lack of solid forecast, SKU management was challenged. It is also very expensive to warehouse in Hong Kong.
Where will you fill your International orders after the Hong Kong facility closes?
We are going to fill International out of our Chino 3PL DC. It will be more cost effective and efficient to do so.
What are some successful partnerships you have with key retailers and why do you think they’ve worked so well?
REI has been a great one. They understand us; we speak to their customer in a very authentic way, and they plan in several of the categories we excel at, including pure outdoor, bike, camping, and snow.
From a 10,000 foot perspective, what does the current state of tech as it applies to our action sports niche look like and how do you anticipate it evolving over the next 6 months? What’s OT’s strategy to react and maximize your opportunities?
There is a lot of interest in the outdoor lifestyle space, wearables, software interacting with hardware, audio, and power. We are expecting to see huge growth in tech in the space as consumer tendencies adopt to purchase product either on-line or from a place they believe is authentic and will speak to them, in their language. I expect software/apps and their integration with the lifestyle to be a driving force behind new successful hardware products. I also expect a number of the non-authentic players that have tried and failed to launch in the space to pull out or make acquisitions that allow them access or the golden ticket that they couldn't figure out on their own.