With the release of its Q3 financial results, revealing an increase of $2.3 million in net sales, or 33%, to $9.2 million for the period, Orange 21 is making solid strides toward raising the bar on its sales and marketing, and beginning to emerge from several tough years of performance. Parent to Carlsbad-based Spy Optics, the company also brought on Michael Marckx in April as president and recently promoted him to CEO of the brand in addition to his presidency.
Spy’s core-product (sunglasses and goggles0 sales increased by $1.6 million in Q3, and we caught up with Marckx recently to find out exactly what that means for the brand moving forward, as well as his immediate goals and forward-thinking marketing strategies for Spy as he transitions into his new role with the company.
What were the major factors that contributed to the rise in net sales for the brand?
Goggles had a very strong quarter with the launch of a new collection that contains our “halo”piece, a new style called the Platoon. It’s an oversized goggle that fits perfectly, is totally on-point, and uniquely Spy. You will note wherever you see ads or promotions from us, whether it’s billboards, print ads, events, social media, online ads, or TV commercials, it’ll be for this higher-end, Platoon piece. In addition, we have a couple of other goggles that are really doing well, not to mention a few new sunglass styles that have begun to resonate.
I think the overhaul we did with the company in April set the tone for success, as we empowered key players to do what they do best without encumbering them, while we also hired new people to come in and make a difference in all areas of the business. The chemistry we created, and the vision we all now aspire to, have had immediate impacts on the brand.
Overall, the sales were the result of a renewed effort on everyone’s part to work collaboratively and ensure that we are servicing our retailers in meaningful ways—better marketing, new POS, better sales support, more efficient operations and a company-wide spirit to really make Spy thrive again.
The sales staff really came together and under Erik Darby’s leadership were able to connect our products with the right retailers. The numbers are the best example we have of their hard work and dedication to the new Spy. I am really stoked on their collective efforts and passion.
What immediate areas will need to be targeted to promote continued growth?
We have very definitive plans for the brand in key areas that will bring new customers though new channels of distribution while underscoring our core proposition in the action sports market.
Rx is really important to our continued growth. We've hired an expert, Jim Sepanek, and he is championing a unique Spy offering that has created a nice demand for our ophthalmic products. We now have new distribution partners who are also now carrying our sunglasses as well. This extension of the brand underscores our fashion sensibilities in ways that are helping inform the development of our core collection.
Product development is the key to any brand's success and we've reorganized ourselves for success here with rising talents in the company. We are now marrying our incredible production capabilities with much more Spy-centric, forward-fashion products along with tech features that create an undeniably unique collection of products.
We've launched back into the Performance category, which was a cornerstone of our brand's heritage from its inception in 1994. We make technologically- and functionally-advanced products, and over the next year we will be bringing to market some very exciting "new" products that will help create a new vitality for our brand, not only with the legions of outdoor enthusiasts whose pursuits require functionally-forward, interesting styles, but also with the core of our action sports consumers who want quality lenses and tech features to go along with fashionable styles that don't look like everything else.
What I am most excited by is the group's collective enthusiasm for where this brand is going and how they are taking it there. In short, our growth will hinge on growing our market share in the core of business—action sports—while creating new opportunities for Spy to express our irreverent POV in the Rx and Performance arenas, and of course making on-point, forward leaning products that better express our differentiation in the market. The most important factor is the people we have who are committed to making our brand a case study in how to create success even in difficult times.
What have been your immediate goals since coming on board at Spy?
Our initial efforts were focused on very simple things, like creating the right chemistry and esprit de corps within the organization so that we could have an operating excellence here. This meant getting all the right new people working on the brand with the remaining team and creating a shared vision and synergies. This entailed unraveling a lot of knots that constricted the company, as well as the removal of landmines that seemed to be around every corner.
We knew we needed a wholesale change in terms of how we operated, but even more so, we needed a POV for the brand and a marketing machine that could reinvent the brand in exciting and meaningful ways—this part takes much longer to take effect. While anyone close to the brand can see the dramatic shift in our creative output, our new campaign won't come out for another two months and it will take a while before that new brand presence has its true impact.
What people will notice is that where our brand used to show up occasionally in various vertical publications and had a very "me too" POS solution, they will now see us everywhere—billboards, TV, regional mags, most every vertical title, on buses, taxis and our own fleet of SPY branded RVs, trucks and vans. People will also notice a dramatic shift in our brand's personality, as we get back in touch with the original irreverent traits that helped make SPY a mainstay of our industry. This includes not only really fun and 'out there' ads, but new athletes that fit our brand, the creation of events that we own, serving our retailers in unique ways, creating fun wherever we are, and the addition of a new marketing director, Devon Howard from Patagonia.
Is there a specific breakdown to the strategy you’ve put in place since coming on board?
In terms of strategies, they lay out pretty simply:
In terms of strategies, they lay out pretty simply:
1. Create a team that is inspired to reinvent SPY
2. Create operational excellence and focus on the SPY brand
3. Completely revamp our marketing
4. Extend our brand into new arenas that are natural fits for our overall positioning, including Rx to underscore our fashion sensibilities and performance to speak to the higher quality and technical features of our brand
5. Create exciting growth for all stakeholders through all of the above…
What will the recent promotion mean for your role with the company?
The new promotion solidifies the goal that I had set out for this year, which was to create a vision and a roadmap to use as a means to manifest palpable change within the organization, therefore establishing a level of confidence in me beyond just heading up the brand’s marketing and becoming president.
Now I get to focus more of my energy on bigger picture things and less about day-to day-marketing, sales, or operations. Carol Montgomery, the CEO I am taking over for, who has an incredible wealth of knowledge on eyewear products, has naturally had a focused purview into product development, which is an area I will have newfound responsibilities in driving. Fortunately, Carol is joining the board and will focus her incredible talents in this area from this new seat.
This new phase for me will have a focus on the brand vision, communicating it, team building, inspiration, and problem solving. I will be surrounded by incredible people who will be running their own various departments. So, in the new framework I will have much fewer direct reports—CFO, Mike Angel; EVP, SO, Greg Hagerman; Marketing Director, Devon Howard; HR Director, Lisa Spahn.
How does your past experience come into play, and what type of learning curve did you experience coming from a footwear company with Globe to an eyewear brand?
Our pasts give us reference points on what to do and what not to do. As with all things in life, it's as important to learn from the mistakes as it is from the successes.
I know at Op I learned a lot about resuscitating a brand and about managing a worldwide network. I also learned a lot from Dick Baker on many fronts of course while at Op.