When sales of Mountain Khakis new Camber pants with stretch twill took off last fall, President Ross Saldarini figured he could stretch his goals for the apparel brand in 2015. So he told his teams in Charlotte, NC and Jackson Hole, WY to plan for 25 percent sales growth.
As of last week, the brand's pre-season sales for fall were running 40 percent ahead of last year. While Saldarini said his team at Mountain Khakis, reps, retailers and parent company Remington Outdoors get credit for much of the success, the growth transcends Mountain Khakis.
“The market still seems very, very strong at outdoor specialty,” he told The B.O.S.S. Report last week in an interview from his office in Charlotte. “Everyone I talk to is up 10 to 20 percent. Most of the small specialty apparel brands are really booked well for Fall 15.”
Saldarini attributes the growth to several converging trends that he says play to the strengths of outdoor specialty and cited economic data to support his argument.
“There is a well documented decline in mall traffic, but consumers still spending money,” said Saldarini “I would suggest one place they are going is lifestyle centers and Main Street, and that's where specialty outdoor retailers operate.”
Scoring with Millennials
Saldarini sees Millennials driving most of them and, in turn, driving more traffic into specialty outdoor doors.
Like their parents and every generation before them, Millennials are seeking out authentic brands that express their personal lifestyle and ethos. But thanks in large part to the Internet, their ability to distinguish between a veneer of marketing and a sincere commitment to values is much greater.
Like many outdoor specialty brands, Mountain Khakis is working to provide those consumers with third-party validation. It is now working to become certified by Fair Trade USA, something Patagonia and Prana have already done. Fair Trade partners help pay for their offshore suppliers to meet Fair Trade's fair labor standards, which require factories to set aside a percentage of their revenue for worker benefit funds. Workers can vote how to spend the money.
“A lot of people make good product at good price points, but a lot of people don't connect with their consumers,” said Saldarini. “There is a difference between brands that inspire and brands that connect and we want to be both,” said Saldarini.
Another trend favoring outdoor specialty is wardrobe consolidation.
Wardrobe consolidation
“Consumers used to have technical apparel at an outdoor store, work apparel at the suit store and lifestyle apparel at Gap and Tony Bahama,” he said. “Today technical and lifestyle apparel are both available at outdoor specialty. It's all part of the athleisure trend and the blending of technical and lifestyle apparel.”
To harness the trend, Mountain Khakis introduced its Camber series of bottoms last fall that use a 98/2 blend of cotton and spandex to provide more stretch.
“Dealers could not keep them on the shelf,” said Saldarini. “We will introduce some more pieces around them this fall.”
“Our business has continued to evolve,” he continued. “Five years ago, we were bottoms only, making 100 percent cotton products. Today we are 65 percent cotton, 35 percent blended fabrics. We see more growth is in outerwear and shirts and tops business and the Women's business, which is growing faster than any other segment.”
Saldarini sees two other closely linked trends magnifying the opportunity for specialty outdoor apparel brands. Specialty retailers are shifting more of their incremental open-to-buy dollars to smaller brands and global brands are shifting attention and resources toward other rapidly growing parts of their business.
“They have started shifting focus away from specialty,” said Saldarini. “They have Asian markets to go after, direct stores to open and online stores to aggressively promote. As some of these baby boomer outdoor brands start to recede and Millennials grow, several brands are set to emerge.”
He counts Kuhl, Mountain Khakis, Prana, Horny Toad as among the brands best positioned to exploit these shifts.
Going forward, Saldarini sees Mountain Khaki's growth coming primarily from expanding shelf space with its 800 existing outdoor specialty doors. There is also an opportunity to open accounts with top retailers who own the 600 remaining outdoor specialty stores that don’t carry the brand. Third, there is an opportunity to grow distribution in the finer Men's clothing stores. Mountain Khakis is now in 50 of those stores, but Saldarini estimates as many as 400 or 500 would make good dealers. Finally, Mountain Khakis nearing the point where it will be able to hire distributors for Europe, Japan and South Korea.
“Mountain Khakis may be at an inflection,” said Saldarini. “We used to have to drive awareness, but we are finding more and more people are coming to us.”
