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Today on THE ROCK FIGHT (an outdoor podcast that aims for the head) we’re bringing out a big gun who can speak to what is happening in outdoor retail.
Eoin Comerford, is the principal at Outsize Consulting and is an outdoor industry veteran as the former CEO of Moosejaw Mountaineering.
He has a unique view on outdoor big box retail as well as what's happening in the specialty market.
On this episode Eoin joins Colin and brings some facts and figures to the rock fight to weigh in on what's happening at retailers like REI, Dick's and Eastern Mountain Sports.
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Episode Transcript
Colin (00:01):
Welcome to the Rock Fight where we speak out truth, slay sacred cows, and sometimes agree to disagree. This is an outdoor podcast that aims for the head, I'm Colin True. And the last few weeks we've talked a lot about what's going on over at retailers like REI and Dick's as well as EMS and the specialty market. So today we're bringing out a big gun who can speak to what is happening in outdoor retail. Today we're chatting with Owen Erford, but before that we got a few housekeeping items for you, my rock fighters. Be sure to follow and rate the rock play. Wherever you are listening, we want to hear from you. If you want to reach out to us, you can email us, send your emails to my rock fight@gmail.com, or you can hold it over to Instagram. And there you can revel in our rock fight action figure series. Bet you didn't know about that. Find us over on instagram@fight.co. Alright, let's start the show.
Chris DeMakes (00:52):
Rock Fight. Rock Fight.
Colin (00:57):
Over the past few weeks here on the rock fight, we've talked a lot about the state of outdoor retail and especially how the playing field between REI and Dick's seems to be leveling out and those conversations got the attention of Owen Comerford. Owen is an outdoor industry veteran. He was the CEO of Moose Jaw mountaineering for 12 years and was a crucial cog in Moose Jaw's sale to Walmart and eventual integration into Dick's Sporting Goods. So he has a unique view on the outdoor specialty retailer as well as the big box retailer. And he's here on the show today to offer his thoughts on what's happening at REI, the comparison of REI to Dick's, as well as the recent bankruptcy acquisition of Eastern Mountain Sports by Mountain Warehouse. Welcome back to the rock fight, and today we're taking another deep dive into what's happening across outdoor retail with Owen Comerford. Alright, well we're joined today by Owen Cumber Ford's former CEO of Moose Shaw, and who is currently advising and growing young outdoor brands and retailers. Welcome to the show Owen. Good to see you bud.
Eoin (01:56):
Thanks for having me
Colin (01:56):
Out. I think I said to you the other day, your entire life, did you ever consider just changing your name to the American spelling of Owen since you live here?
Eoin (02:04):
No. No, never thought about it. I mean obviously I get a lot of people that call me Ian or something else and usually when I explain if the E is silent, it makes sense, people get it, but I'll meet people, we'll be talking back and forth at Owen and then they'll see it spelled and then they'll call me Ian. So it's annoying but it's a conversation starter.
Colin (02:25):
It is a conversation and that's a really good point. If the E is silent is just phonetically correct. Right. I mean
Producer Dave (02:31):
I honestly thought we were going to talk to a member of the Lord of the Rings cast, which was pretty
Colin (02:37):
Exciting. It was a little Tolkien going on
Producer Dave (02:38):
With your name. Yeah, it was pretty excited. Let's be
Colin (02:39):
Honest,
Eoin (02:43):
In my high school class there were six Owens four eos one OWEN, and then one the ancient Gaelic spelling E-O-G-H-A-N. So try that out for size.
Colin (02:54):
Wow, that's rough for that kid. My buddy Luke, who I knew, we lived in Seattle, he a son, he's from Ireland and they named him Finn. They spelled it like fi, like F-I-O-N-N. And I'm like, I appreciate you your heritage buddy, but if you're really going to raise him here, you just created a lifetime, a nightmare for this kid. For the rest of his life he's going to be, just call me Finn, it's fine. Just call me Finn. Well, a few weeks back here on the rock fight, during a conversation about outdoor participation, I was positing that a decline in core participants would be felt at specialty doors and our friend Wes Allen, who owns a specialty door, cited some statistics that show Reis more at risk at this point. That episode followed two more on the show where we dug into some of their struggles there at REI, especially as it pertains to the outdoor retail competitive landscape when compared to someone like a Dick's Sporting Goods. And all of this moved you to put up a post on LinkedIn earlier this week comparing the opex of REI and Dick's to see what was happening from these two from a dollar and cents perspective. So I do want to ask you who you had to kill to get that information. I mean that was pretty in depth over there. Nice job.
Eoin (03:58):
Thank you. Yeah, it's all publicly available, both publicly report their numbers. So yeah, you have to do a little digging to find the old REI numbers, but they're out there. They are there. They weren't always. Oh yeah, but they weren't all apples to apples, so I had to use a little bit of tribal knowledge to figure out occupancy costs versus this or that. But yeah, it was an interesting comparison I think.
Colin (04:20):
Well, so when you did the work there and you dug into it, what did you discover comparing the two head to head? Are they at an interesting place? Are there some correlations to be made?
Eoin (04:30):
Totally. I think there were three big numbers that jumped out at me. The first one is actually the productivity in REI stores. Even last year you could say an off year over $600 a square foot. And within the retail space, typically $300 is kind of considered average or the standard If you're doing 300 bucks in specialty retail, that's not bad. So $600 is just really strong and I think it talks to just the stickiness of the co-op model and that membership model. Yes, maybe an older customer but loyal and they keep coming back and they keep spending. So if you told me that number by itself, I'd say, oh, these guys are just killing it, right? Yeah, you look at the Dix number by comparison is under $300. So that was the one thing and just really a really impressive number. But then you say, okay, well so then how are they not killing it with those numbers?
(05:26):
And really the two numbers after that that jumped out were their merchandise cogs. So in other words, the amount that they spend on the cost of the merchandise that they sell and then also their payroll. Both were really tough relative to history but also relative to the competition. And on the merch cog side, they had been, or their margins let's say, so their margins back in 2021, which was a banner year for the whole industry obviously, but their margins were 47%, which is really strong. And Dick's at the time was 44.2% and that 47 is a big number. Historically though, REI was in the sort of the 45% range. So really amazing number. Look at last year it's 38.7%. That is a massive drop. I mean just incredible. And so you look at it and you go, well what the hell happened here? Because I think everyone in the industry had a bit of a tough time last year with margins, but nothing like this.
(06:30):
This is out of the ordinary and really it comes down to their private brand. It was really what killed them because if you look at the end of 21 banner year, they made the same mistake that almost everyone else in the industry was thinking that oh, 22 will be just like 21. We're going to order, not only are we going to order as much as we sold in 21, but we were actually constrained, so we're going to order even more. So they have all this pipeline of product coming in and private brand plus. So by the way, they're leaning into private brand because it's higher margin, they think maybe it drives loyalty, whatever. So more and more of the stuff that they're selling as private brand. So they do all that and then they're hit with this, I think it was in late 21, they had this huge IT implementation disaster and what happened was they couldn't get product through their warehouses to their stores and so everything backed up and then by the time it all sort of unwound in 22, it flowed into the stores and created this huge bottleneck and it is kind of a huge issue with their private brand and that flowed into 23.
(07:34):
So let's say the private brand had been doing a 60 margin in the past, I mean they were blowing stuff out at 40, 50, 60 off and quality that
Colin (07:45):
Kills profitability. I mean forever those products have had way higher margin than anything they're buying from their vendors
Eoin (07:53):
And solid stuff. But they would just, because the thing is as a retailer, one of the nice things typically is that you can manage your inventories to a degree by canceling on order. The brands hate it obviously, but we'll place as a retailer, let's say for the stuff that we're getting next spring, those orders were placed two months ago, so they're being placed like nine months in advance. Now if things start to get a bit shaky coming out of the year, you might start canceling off some of those orders to kind of size your inventory. Now you can do that with another brand. You can't do that with your private brand. You've already committed to that stuff. You bought the fabrics, you bought the stuff, it's being manufactured, it can't go anywhere else other than in your store. So really what happened with REI last year and it was this, what I would call it, the private brand pinch, they just had way, way too much.
(08:48):
And within retail we talk about something called open to buy, which basically means, hey, as a merchant, let's say you're the tent guy at REI, you have X amount of open buy or X amount of inventory that you can have on hand to drive your sales. Now in a normalized world, that's fine, you've got so much that's for private brand, you've got so much left over to buy all the other brands. Well, what happens when you get all backed up with this private brand is you don't have a whole lot of room, your private brands for the other brands. And so they had to go through and just absolutely slash the other brand product. So the stuff that they were buying from the whatever, the Marmite, the mountain hardwares of the world and then that all rolled downhill. Then those brands, that stuff was already on the water for them. So they're like, oh shit, what do we do now? So they've got to either try to push it to other retailers who already have enough stuff, thank you, or they have to push it to their own D two C and start discounting themselves and then it creates suspicious cycle because now RE, I can't sell the stuff they do have, it's on and on we go. So it was a big driver in the whole margin issue for the year
Colin (10:03):
When it compounds everything. I would imagine now profitability is impacted, so now you're dealing with labor union problems and all of these other things and it's just one thing after another to kind of drill down. Are these, I kind of want to know, are these problems of the moment or problems of the long term when you look at these numbers and hear that story? So based on the posts you put on LinkedIn, there were about 50 comments or so you got a lot of engagement with it, but there's a lot of goodwill baked into REI from a lot of people on there and we say the same thing with folks like Patagonia. It's something objectively like, oh, this should be improved. It'll come out and you'll still hear the cheerleaders who will come out, oh no, these people can do no wrong. Which I mean that's somewhat, it's like a good and a bad thing I feel like about the outdoor space.
(10:47):
There's a lot of that. That said, if you go to re's Reddit board right now, you'll find a lot of vocal REI employees who are weighing in on how things are going and some of them are very typical and some, there's one that I would suggest reading called is REI going to make it if you're interested in where maybe some people are standing on this, which look, it's the internet, take it all with a grain of salt. However, putting all that together. So putting on your sort of corporate leadership hat for a second, where do you start with REI today? If someone said, Hey Owen, here are the keys to REI, where do you start?
Eoin (11:19):
Well, I think the first thing is you have to fix the private brand program. You have to fix the planning, the management of that. I would say they went a little too far because as an enthusiast customer going in there, yes, I'm sure there are people that love the REI brand, but there's also a lot of people that love other brands too. And if your private brand is pushing out that other stuff, that's a challenge. And also it does create this inflexibility for your inability to basically react to trends, react to volume, react to sales. So I think that needs to be done Now I would tell you though, it's already everything that I'm saying here by the way is not news to REI or their management. I don't think
Colin (12:01):
They're listening to this podcast.
Eoin (12:04):
Well, they probably aren't, but they're not sitting on their hands since the big issues back a couple of years ago. I mean they've basically turned over almost the whole executive suite. They've brought in a new position, chief supply chain officer to deal with that side of things, a new VP of inventory planning to deal with all of that side to make sure they're ordering all the right stuff and a new CTO to deal with the technology pieces. So they're working on this and that would be the first place I would look. The second place is that jumps off the page as payroll. You look at it, payroll, an REI 25% of revenue, about 14% at Dick's.
(12:52):
And it's even crazier if you look at it in terms of retail dollars per square foot because obviously REI has fewer stores, smaller stores, so retail dollars per square foot or payroll dollars, sorry, per square foot, $166 at REI, $34 at Dick's. Wow. $34. So it's about a five x difference, but account, if you account for higher hourly wages, which they definitely have at REI, basically the way I look at it is if you're in a section or if you're standing in one square foot at an REI, you're four times more likely to be able to see an associate there, a green vest than you are to see somebody at a Dix.
Colin (13:42):
Right? Well, that mean that kind of definitely speaks to the model of both stores even historically. I mean even I remember when I was tech wrapping back in the day and I would do Dick's clinics, I don't know if they still do clinics at Dick's, I can't imagine that they do. It was still difficult to get a group together who are even engaged and even cared what you had to say versus in REI. And I've kind of been on record as I've never been a huge REI fan as a consumer, but I still value what they bring to the industry. So even as a consumer, I still like their stores and you're still more likely to run into somebody who at least it says, Hey, how are you? Which you may not get at all at a Dick's even if they don't know the details of a certain product.
(14:19):
It does feel to me that they're always REI is really kind of in a rock and hard place kind of situation no matter what the topic is we're talking about, right? If it's you cut back on the house line of products and that helps you with inventory, but it probably helps, it hurts you on margin if you cut back on employees. Well, the green vest is what's known about your stores. It's kind of a, and they're still wanting to expand. There's an announce they would announced they wanted to open to 10 stores this year. Does it feel like maybe the smart thing to do right now is a little bit of a retreat, cut back on some of those plans, kind of get your house in order to have maybe she even close a few doors that don't want to put anybody out of a job. But that's just what feels to me like probably the right course of action here.
Eoin (15:03):
I don't think it's about retrenching because again, if you're getting $600 a square foot, that's huge productivity. And so those stores should be kicking out really solid four wall contribution, what we call it in the industry. So they're kicking out profits to support the big corporate entity. I don't think it's about closing. You should always be looking at your store fleet and potentially cutting the ones that aren't working or really investing a lot of time with landlords to say, Hey, listen, this isn't working. We're going to move down the street if you're not willing to help us update the store or do this or do that. And I think it's really more about the rock and a hard place thing is I think a really good way to look at it because one of the reactions to the LinkedIn post was, well, this isn't a fair comparison. It's apples and oranges, which it is. But REI isn't outdoor specialty. I mean, do people believe that that it's the same as going to your local gear store? I don't think so. It's not the same experience, it's not the same level of interaction necessarily with the folks on the floor. It's not the same brand mix. It's not right. So it's not specialty outdoor, but it's not big box really. It is. It's sort of
Colin (16:24):
Between the two. They're kind of a weird in-between, they really are,
Eoin (16:27):
And then they're a co-op on top of that. I mean the co-op model, I think actually it's a blessing and a curse. It's a blessing because of you have all these members, 23, 20 5 million, whatever it is, very loyal, look forward to their dividend, et cetera. But then on the flip side, it's almost embarrassing if you may have a profit as a co-op because you're a business, but you're not a business. And so the tendency is in the good years you kind of try to hide the profits and then in the bad years you're like, oh shit, what do we do now? As opposed to if you're just a for-profit retailer, you're going to Dick's for example. They are just laser focused on costs so that in the good times they've got great profits, but in the bad times, the bad times aren't as bad. So whereas I think because of re's co-op history, the tendency has been they haven't been as tight on the costs when they could have been. And now I think what we're seeing is some of those issues in the tough
Colin (17:36):
Times. I mean, it's our store vibe. Probably not going to hear about unionization of efforts at Dick's. I'd be surprised. Right. I mean it's, and I'm not judging either way on that, but just you see how the history at REI and the affinity for the store and we give back to you and opt outside and all of these things then lead to this sort of like, well, this is different. Because I remember thinking like, God, if I would just go get another job if I was in the position of some of these folks, well, some of them are really passionate like no, no, no, this is what REI stands for and we got to defend what REI stands for, which
Producer Dave (18:13):
I'd like to ask a question that great revenue per square foot number, how much is that as a result or correlated to that high payroll per square foot? I mean are those hand in hand?
Eoin (18:32):
I think there's definitely a relationship between the service model at REI and the revenue per square foot. You can't deny that, right? I mean the people are coming in and they want that level of service. Is it a hundred percent? If you cut back a little bit on the staffing, would it really impact the dollars per square foot that much? I don't know. REI themselves did a bit of a restructuring late last year. They actually cut out a whole level this lead title within the store and that did cut some people. So they're definitely looking at their store model. But it doesn't shock me that REI is going through this union thing right now because typically the reason why unions don't typically work in retail or even in Amazon in most cases is because of the turnover.
(19:23):
To have the ownership to see something through a union campaign, it's like a two, three x year campaign. To make that happen, you have to have people that have real ownership for the company and for their position and really want to better it. And so you have to have this longevity. And so with retail that isn't typical with the sort of turnover you see. But that's not the case at our ai. Obviously you've got folks there that have been there for a long time that really do feel ownership for the company and so therefore want that for union representation.
Colin (20:02):
Another thing we've been talking about, and it came out of the participation conversation is where people are shopping and I send them one of those podcasts that anecdotally I kind of do see a little bit of a leveling the playing field just in terms of even where I'll shop. There's a dicks that's closer to my house versus an RE. I also have a G specialty door that's really close to my house. So if I want an outdoor experience, I go to my GOA shop, shout out to Nomad Outfitters, no free ads, but there's where we are. But then if I just need the staple, the Dick's kind of has a lot of the same stuff from a staple perspective that I might find it at an REI, which is 25, 30 minutes away. When you look at the numbers, or even just anecdotally, where do you think people are shopping? Do you feel like that playing field is leveling in terms of how people view these stores and where they shop?
Eoin (20:51):
I would say neither of us on this are typical shoppers, right? Well, I've never actually bought anything at REI. I've competitively shopped in REI, but also I think you're an outdoor expert, so you're not necessarily going into a Dick's or an REI needing any level of assistance. I think the bigger question is around new customers and the younger customers and people that are new to the outdoors. One of the things that I know you've touched on this podcast is the OIA participation report, which basically said, Hey, yeah, we had all these new participants that joined us in covid. Most of them are still participating, maybe not as often. And then the core enthusiast is definitely not participating as often. And so the winner I think is going to be the folks that gain the loyalty of that new participant. And to me, the question is who's that going to be? Is it going to be the reis of the world? Is it going to be the GOA retailers of the world or is it going to be the Dicks of the world? And I think what's going to really tell the tale over the next five, 10 years?
Colin (22:10):
That's exactly kind of what I'm getting at When I think I make the comparison of the stores, it's when I went in and sort of surveyed what was in my local dicks and trying to put my shoes of the a new or a younger outdoor consumer, there's really nothing that they can't get at Dick's, right? In terms of to go have sort of a basic outdoor hiking or camping adventure, an outside adventure, an outside adventure, right?
Eoin (22:31):
Yeah, I think the keyword there is basic, right? I mean, think Dick's. Dick's definitely is covering the bases, but not to the level that an REI would, right? Both in terms of brands and in terms of depths of options. So I think that's a big part of it. And obviously then they're not covering it in terms of the level of assistance. So if you are new to the outdoors and you're not sure what kind of pack do I need, you're not going to get a lot of great help or have a ton of options at a Dick's, whereas you certainly will at an REI and then even hopefully more so at your GOA store. But I think where Dick's has the advantage with these new folks is that probably most of them already shop at Dick's for other things. And so while they may not get a lot of assistance or have all of the options that they would have in an REI, they have a familiarity there and a comfort with going into those stores.
(23:33):
And I think that's a key thing that specialty retail needs to really embrace. And it was, I think something that Wes talked about on your podcast is, especially retail, really has to be that place where people want to go and feel welcomed and not shamed for not knowing what a Caribbean is and really feel like that they can go in and have assistance and have people that will embrace them and say, yeah, hey, I'm so excited that you want to get into this activity. Let me tell you all about it and how much I love it, and here's what I would do.
Colin (24:07):
So beyond the I Dix of it all, you also recently weighed into one other topic that we discussed here in the rock fight, which is about Mountain Hardware is bankruptcy purchase of Eastern Mountain Sports. Anyone listening to this who hasn't heard or hasn't heard those episodes, EMS is looking to be acquired out of bankruptcy again by UK's Mountain Warehouse for $5 million and with only seven of their doors remaining, if that sale goes through, go listen to Monday's episode of the Rock Fight. If you want to hear more in your post again on LinkedIn, you made the case for there being some upside to bringing EMS on if you're Mountain Warehouse. And I think I agree with you and there's a lot on paper that makes sense, but like I said on our Monday show, I definitely have a tough time believing in EMS to get over the hump.
(24:49):
I think, I dunno if you listened to the episode, but I talked about how when I was at Polar Tech, I over 10 years ago said, we always viewed EMS as your drunk uncool. You really were really rooting for, you're like, come on, we really believe this is the time you're going to get it together. You can get clean, clean, you can do it. Right? And I pointed out that was three owners ago. So if you had to sort of predict how this plays out, what do you think happens here with EMS and Mountain Mountain Warehouse?
Eoin (25:16):
Yeah, hard to say. I think the first question is why, right? So Mountain Warehouse, to those that don't know, they're pretty big over in the uk, 200 plus stores I think over almost 400 million in over $400 million in sales. So they're a good size, but they're very much on the value end of the scale. Their average transaction is like $35, right?
Colin (25:48):
Oh wow. The HI or Big five of European outdoor kind. Yeah,
Eoin (25:55):
And mainly their own product. It's about 80% mountain warehouse stuff. So they produce a lot of product. And so I think the big, one of the things about EMS that was always a core part of theirs was that they had about 50% of their volume was their own EMS brand product and a lot of their shells and pants and whatever go back for decades in terms of the product. So I would think the first thing they're going to do is they're going to come in and say, well, cool. It is great that you have this private brand thing. We're just going to take, we're going to go through the hardware catalog Mountain, sorry, mountain Warehouse catalog. I don't want to piss off my good friends over at Matt
Colin (26:35):
And Emeryville. No one talking about you hardware. Go back to sleep. It's fine.
Eoin (26:38):
No, Troy, don't worry about it. It's okay. No, but the Mountain Warehouse folks, I would think they're going to go through their catalog and they say, okay, well this is the closest thing to this EMS style. This is the closest thing to the pants and
Colin (26:52):
Logo, swap it and ship it to the us.
Eoin (26:54):
Right? Exactly. And that's going to be the new EMS line. And then I think the bigger question though is what's the rest of the store going to look like? Because is it going to be just basically an EMS version of Mountain Warehouse, so pretty much all their stuff or are they going to try carry more or whatever the boots and stuff that they tried to bring in all these sort of Euro brands or will they want to bring in outside brands? Will outside brands want to be there after? I mean, obviously brands have been a little burned over the last X number of years.
Colin (27:35):
That's true.
Eoin (27:36):
Yeah. I don't know. It is going to be really interesting. So step one is that right? Come in, figure out the merchandise assortment, rework things, get it out there, see how it works, and then
Colin (27:48):
Well, the opportunity is probably different for Mountain Warehouse because it's kind build up your point. And up until now, MS probably some of the problems were they were probably overvalued almost every time they change hands and a lot more problems and like, Hey, listen, 5 million bucks, which is less than one store's worth of revenue and we're only going to take seven of them and we're going to kick the tires really hard before we figure out what we're going to do with these things. It might be the first time there's been a real opportunity to build it back up from such a low point,
Eoin (28:15):
Right? I think the question, so let's just say it works. Okay, let's say it works in those seven stores all up in the Northeast. Then what? Because they already have nine stores in the US Mountain Warehouse does. I think they're all in outlet centers, which is interesting. You
Colin (28:35):
Just got Sierra's attention.
Producer Dave (28:36):
I was just going to say, we already have a low market player in the space and it's Sierra.
Colin (28:41):
Sierra just parked up was like, excuse me, what? Who's standing on our
Producer Dave (28:44):
Corner?
Eoin (28:45):
Value pricing? That's a whole other podcast. But yeah, I mean this Sierra thing, just as an aside, I really question them adding as many stores as they are a lot because they're living off of an inventory bubble that is not going to continue, right? They
Colin (29:03):
Just going to turn themselves into pfas outlet. What are we doing here?
Eoin (29:08):
Well, that'll work for a year, but then what? Right?
Producer Dave (29:12):
No, no. PFAS is forever. They've said, so this will never end.
Colin (29:18):
That's the marketing that pfas needs. Just buy this one coat, you'll never need another
Producer Dave (29:21):
One. That's right. There you go.
Eoin (29:24):
No,
Colin (29:25):
No, but sorry, your point. Yeah, about Sierra.
Eoin (29:27):
But the thing, okay, if you look, go back to 2008, 2008 and 2009 in overall retail luxury retail, it was just swimming in product. It was a disaster. And so that was when the Gil Group, do you remember those guys, rule la, those guys, yes. They all came along because they were, all of these brands were falling over themselves to give them amazing deals to get through all of this inventory. Well, fast forward five years, the brands got their inventory house back in order Rule la, the Guild Group couldn't get the stuff. And I think they're no, are they even around anymore? I didn't even know. So I would seriously question Sierra growing as aggressively as they can because one of two things happens. Either the industry continues to overproduce and they're fine, which God, I hope that isn't the case. Or the industry gets its act together and then Sierra's like, oh shit, where are we going to get all this product?
Colin (30:25):
They also, we do know that they very much contract with a lot of folks to produce for them as well. But you're not wrong though. I mean that will be, it doesn't mean that they're going to produce that much more to continue to open 20 to 30 stores a year too. So a balance will have to be struck at some point.
Eoin (30:43):
Or I think what you'll see is you'll see a lot more non outdoorsy brands kind of showing up in there. Like you go in and be like, oh, oh, it's a Tony Hawk brand, whatever, and it's just like, oh, that's outdoorsy. Sure.
Colin (30:58):
Sierra picks up the phone to TJ Max's headquarters got what they got over there. Can we need a few things?
Eoin (31:05):
Shop London Fog, that would work, right? London Fog jacket, we could do that. But
Colin (31:10):
We started out the road when you talking about Mountain Warehouse with nine doors and we derailed your final thought there with EMS and Mountain Warehouse.
Eoin (31:17):
Yeah. So really I think if the EMS thing works, then the question is what's next? So you could say, well let's take our existing nine stores in all these outlet stores. Let's flip those two EMS because people know who that is maybe and with EMS merch and go down that path. Then the next thing is to say, okay, wow, we're going to go on a nationwide rollout of these EMS branded mountain warehouse stores. That's where I think it gets a little sticky because while EMS has absolutely got a brand, brand and a presence in the northeast, I don't know, you go into Chicago, go into Kansas City, go anywhere on the West Coast, people are like EMS, never heard of it. It's a medical device company. There you go.
Colin (32:06):
No, you're not wrong. They tried before. I mean it has been a while since they tried to go that far outside the region, but they never tried again, no matter who the owner was. I think you're right about that. I think the assortment question you bring up is interesting given what you know about what you've just described about Mountain Warehouse. That being said, these are in all the towns, the point I was making about in the Northeast, they're the specialty retailers in a lot of these towns. I mean, they really have maintained that authenticity as an outdoor store more so than an REI and if they just now become a little bit more of a discount outdoor apparel adjacent sort of store, new Englanders don't keep their mouth shut, I think they're going to hear about it. So I think that's going to be an interesting thing to keep an eye on how they sort of develop the brand and what they stock.
(32:53):
It probably is a worthy risk, but you're right. I mean where does it all play out? I guess it's still kind begs the question. I guess the last thing to really talk about is we've gone all the way from Dixon, REI to now. If you focus on either small chain outdoor specialty, we've talked a bunch about Gearhead Outfitters on this pod. You look at the state of independent outdoor specialty, the thing that gives me concern there beyond, even if the participation report isn't adversely affecting them, is doesn't seem like there's a lot of young owners entering the specialty space. I think that's something I'm sure the go A is keeping an eye on of once all these folks are done, are they selling their stores, are new people coming up behind them or are we looking at the depth of specialty retail in the next 20 to 30 years? So are you optimistic about the future of small independent outdoor retail?
Eoin (33:42):
Well, what I would say is I think it's critical that we do support and keep outdoor specialty retail because they are the entree to that jumping off between somebody who's just into the outdoors versus who becomes an enthusiast. I think that generally happens at an independent specialty retail store, not at an REI or a Dick's. So I think they're absolutely critical. But yeah, there are challenges. My hope is that brands will get the message and start to really support independent specialty retail. And I think that's starting like at GOA this year, there were a lot of senior level executives from these brands, not just like the national sales person, but there was presidents of brands at this thing. So I think the brands are starting to get that message. That wasn't the case I would say three or four years ago, but I think it needs to go further.
(34:38):
One of the things that I am pushing that I think needs to happen is brands need to come together between their D two C and their wholesale and really think big picture about the brand and do things like really if you're on a PDP of a brand website, you should be able to buy it on that site, but just as easily buy it in the local specialty retailer. And they should be pushing it on that site, pushing it for sustainability, pushing it for the overall good of the industry. But by the way, take a commission. I mean, let's actually make it so that all of these incentives are aligned and make it more of a marketplace to where, hey, you want to buy this jacket, you can get it at Joe's Outdoor store down the street, and we'll do the whole transaction here on xyz.com, go into Joe's, pick it up, the whole transaction is done.
(35:35):
We take our commission, they get the sale. Everybody is happy but too much today what happens is you've got the D two C folks that are in a totally separate silo than the wholesale folks. I mean, they barely talk to each other in most of these brands. And so the last thing that D two C folks want to do is to divert that sale or that person that they get onto their website to a local person because then they lose the sale. And that's totally the wrong way to think, but that's the way the incentive structures are built today.
Producer Dave (36:05):
This is a great, great point. Also too, as you're just saying that the new renewed focus on these brands looking at their wholesale channel, it feels to me it's less visionary connecting of the dots for the health of the industry and more because they so totally overplayed the D two C hand and it's coming back to bite them.
Eoin (36:27):
Oh, totally. Yeah. I mean so many of these brands, they looked at Nike as like this shining star of whatever Nike can do no wrong, whatever they do, we've got to do it. And they didn't think, well, okay, maybe Nike's great because of the product and because of their retailers, and just because they're doing it doesn't mean it's right. But it was totally a, the move to D two C was totally internally focused. Did the consumer say, Hey, you know what? I would love brand X. I would love to not be able to find your product in a local store and touch it and try it on. I'd much rather have to go on to the internet, get it home, then figure out it was wrong, send it back to you, and then have you send me another one. That's much better. I would prefer
Colin (37:14):
That. Let's wrap it up there. Thank you so much, Owen, for coming on. I almost called you Ian.
Producer Dave (37:20):
It's the
Colin (37:20):
Fellowship. Thank you so much for coming on. Yeah, the fellowship is back. Really appreciate the insight. Would love to have you on again in the future. In the meantime, what, what's going on? I know you're working with a few brands, you want to shout 'em out real quick. Who you got in the pipeline that you're working with right now?
Eoin (37:34):
So a few different folks I work with Lives in, which is an amazing originally Pants brand, but now adding to the line and we've overalls now and we've got Tops coming this fall. So very exciting stuff there. I work with Wild Rye, which is a great women's brand in the mountain biking and ski area. I work with a couple of startups in electrical, electrification, electric wagon, a bunch of folks, and
Colin (38:05):
Nara, let's not forget about nara.
Eoin (38:08):
Oh, let's not forget about nara. Yeah, NARA is one of my faves and did a CoLab with Lives in, which was great. Yeah, and the list goes on and on this I probably work with about 10 or 12 different brands all kind of in that early-ish stage, but it's a hoot. I'm having a great time.
Colin (38:26):
Well, let's get some of those brands and founders focused, featured over on Gear and Beer. We'll get some of that lined up for the future.
Eoin (38:33):
Absolutely. It sounds
Colin (38:34):
Great. Alright, thanks for coming on Owen, I appreciate it. Yeah,
Chris DeMakes (38:36):
Thank you.
Eoin (38:37):
Thanks guys.
Colin (38:40):
Alright, that's the show for today. Be sure to head over to the Gear and Beer podcast feed because tomorrow a new episode drops that features Chris Hampton and we talk about climbing strengthening tools. And of course, follow us here on the Rock Fight so you don't miss an episode. The Rock Fight is a production of Rock Fight LLC. Our producer today was David Karta. Art Direction provided by Sarah Genser. I'm Colin True. Thanks for listening. And here to take us out. It's Krista Makes to sing the Rock Fight Fight song. We'll see you next time. Rock fighters. Rock fight, rock
Chris DeMakes (39:09):
Fight. Rock fight. Here we go into the rat bike where we speak our truth, stay sacred cows and sometimes agree to disagree. We talk about human power, outdoor activities and pick bikes are about topics that we find interesting. Black back culture, music, the latest movie reviews. And in for the head, this is where we speak truth. This is where we speak truth back. Welcome to the.