American Recreation Products will replace dozens of outside reps with an in-house sales force in 30 days in a bid to cut costs and reach earnings targets of Sun Capital Securities Securities Group LLC. The move is part of a broader reorganization of the company that places all five of its outdoor brands under a new organization called Boulder Outdoor Specialty Group (BOSG) headed by Kelty President Kenny Ballard. Sierra Designs President Paul Gagner has left the company.
The company's brands include Kelty, Sierra Designs, Slumberjack and Wenger.
Mondays changes mark the latest in a series of steps taken since Sun Capital acquired ARPs former parent Kellwood Co. in a hostile takeover a year ago. This summer, Sun Capital spun off ARP from the rest of Kellwood and combined the finance, operations and marketing functions across all its brands. Slumberjack and Wenger President Geoff OKeeffe departed and the two brands were absorbed by Kelty. In early October, long-time ARP President George Grabner retired unexpectedly and was replaced by industry outsider Jim Baumann. On Monday, Ballard said BOSG will now also consolidate customer services sales and product management for all its brands.
“We are taking the best minds, best practices and best processes and allowing them to talk to each other,” said Ballard. “Sun Capital is clearly focused on performance and these are very viable brands and they have invested and will continue to invest in the brands. They want them to be distinct and successful. We are moving in the right direction.”
Russell Rowell, who headed product management at Kelty, has been named director of product development on the equipment side. Rowell will oversee all design and development at BOSG, where he will be “honing the product incubation process while maintaining an essential differentiation between brands.”
Melodie Miller, who has overseen a recent revamping of Sierra Designs apparel line, was named director of product development for apparel. Sierra Designs is the only brand in the portfolio introducing a new line for fall/winter 2009-10. Allison Snider has been put in charge of customer service, including the dealer service, warranty and repair teams, for all BOSG brands.
The internal sales force will be directed by a trio. Peter Novak, who has been serving as director of sales for Kelty, Kelty K.I.D.S, Wenger and Slumberjack, will oversee sales on the East Coast. Jason McGibbon, formerly director of sales at Sierra Designs, will oversee the companys new dedicated sales force in the West. Josh LeBaron, sales manager for Slumberjack and Wenger will be handling sales management for all of BOSG.
The trio will be responsible for hiring eight new sales people in as many territories in the next 30 days, when outside reps will hand off the business.
BOSG plans to implement a B2B platform that will allow dealers to view inventory and place orders online 24/7/365 via the Internet.
Reps contacted Monday said they were told they would be compensated for any orders placed in the next 30 days for the brands. “It is what it is,” said one. “With this lovely economy, they are doing what any good business would do.”
Others wondered how the company will uphold dealer service and market share when are so many more brands are competing for the same shelf space in a shrinking economy. In one territory, an agency that uses a half dozen people to rep just one BOSG brand will now be replaced by a single person representing all five brands across multiple channels of distribution.
“My guess is they will lose 40% of business without reps in the territory,” said a rep.
“Five years ago, Kelty had the mid price niche to themselves, but everybodys prices have come down on top of Keltys stuff,” said one rep. “If Im a retailer and I can buy Marmot, The North Face or Kelty, which is going to drop out? “
