Black Diamond Equipment CEO Peter Metcalf said REI, EMS and MEC have been asking BDE to enter the apparel business in recent years because many of the original specialty outdoor brands have widened their distribution to department stores, full line sporting goods stores and other channels.
Metcalf told investors at the Oppenheimer Consumer Conference that it will take BDE five years to build apparel into a meaningful business. The company recently hired an executive from Patagonia to head up the initiative, which aims to launch its first collection in spring 2013.
Metcalf said he is confident BDE can maintain its authenticity as a core technical/hardgoods brand even as it grows its apparel business much in the way that Burton did in the snowboard category.
Burton did a very exemplary job of becoming one with the sports it served-snowboarding, and being the leader in boards, in accessories in boots and in snowboard apparel, said Metcalf.
When Burtons sales peaked at between $600 and $700 million, more than 60 percent of its sales came from snowboard apparel, Metcalf said. But it did not feel just like an apparel company. It was in how they advertised, how they merchandized, what they promoted and what they didnt do, Metcalf said.
By contrast, Metcalf said The North Face has become a $2 billion global brand that feels overly distributed.
If that was Black Diamond, that would be putting to risk I think our core business, Metcalf said. But they are $2 billion in global sales. So when we talk about getting our apparel in ten years to $250 or $300 or $400 million, where we have $300 million plus equipment business in other brands I dont think we are at any risk at that point. I think you are talking about really having to think about this hard when you are north of $500 million.
