Citing the rapid expansion globally in climbing gyms already and a huge boost expected by climbing becoming an Olympic sport for the 2020 games, John Walbrecht, president of Clarus Corp., the parent of Black Diamond (BD), sees the appeal of climbing expanding by leaps and bounds in the years ahead.
Speaking at the Stifel 2018 Cross Sector Insight Conference in Boston, Walbrecht said climbing gyms in the U.S. have grown from about 220 in 2014 to about 640 currently. He wasn’t certain how many climbing gyms would open this year but noted that Black Diamond is selling to 40 new climbing gyms this year and overall predicted “somewhat north of 20 percent annual growth” in gyms in the years ahead.
Other signs of the demand for climbing gyms has been the arrival of climbing gym conferences over the last two years and Walltopia, the Sofia (Bulgaria)-based company that ranks as the world’s largest manufacturer of artificial climbing walls, stating that sales growth remains rampant and that production capacity is at 79 percent.
Part of the appeal of climbing gyms is they’re highly social, according to Walbrecht. He noted that Match.com, the dating site, has cited climbing gyms as the “best environment for dating services.”
Climbing gyms are also highly accessible with people of various skill levels able to use ropes at different levels and climb right next to each other.
“We can all climb together and there’s not many sports where you can do that, right?” noted Walbrecht to the investor crowd. “Everybody that plays golf has been out with the first-time hack or played tennis with somebody who can’t play. At a climbing gym, everybody can be having fun together.”
With climbing set to become an Olympic sport for the first time at the 2020 Olympics in Tokyo, another lever of growth is expected.
As an example, Walbrecht noted how famous Apolo Ohno became after the American short-track speed skater netted eight-medals at the 2002 Winter Olympics.
“Anybody interested in short-track skate?” he asked the investor audience, and saw no raised hands. “That’s how obscure it is, and if that’s what it did for Apolo Ohno, there’s going to be famous climbing names coming out of the Olympics and beyond globally because of that experience. And it will change the face of it.”
Walbrecht further noted that he was working was with Spyder in 2002 when that brand sponsored the U.S. Olympic team uniforms at the games in Salt Lake City. He said Spyder over the next three years “blew up just from the exposure of what came out of the Olympics.”
Walbrecht also agreed that the sport is seeing a boost from the popularity of “American Ninja Warrior,” now airing its 10th season on NBC.
From a merchandising standpoint, climbing continues to have a largely untapped and massive lifestyle opportunity. Walbrecht noted how a male teenager wearing Vans is often recognized as a skateboarder, one wearing Under Armour might be identified as a team sports enthusiast and a teenager wearing Billabong or Hurley is often seen as a “surf kid.” Unlike these other sports, climbers don’t yet have many brands similarly ”telling people they’re a climber” after they leave the gym.
As a further example of the size of the lifestyle opportunity in climbing, he noted that in the surf world, Ocean Pacific (OP) was the only surf brand before the surf market “blew up.” By 2014, surf had mushroomed to a $7 billion opportunity led by six brands. Said Walbrecht, “So the market opportunity is huge on the lifestyle side of this where people have a backpack, a logoed cap, a t-shirt or whatever that says they’re a climber. And it shows up in our business. Our fastest growing category is logo wear.”
Indeed, Walbrecht overall said apparel is the fastest growing category for Black Diamond, up 70 percent in the first quarter and oversold by more than 25 percent. The category still only represents 10 percent of Black Diamond’s sales. Footwear, launched last summer with 60,000 pairs, is expect to reach 155,000 pairs this year and double again next year. Said Walbrecht of footwear, “We’re racing like hell to keep up with that demand.”
Overall, Clarus expects to continue to see double-digit growth in the years ahead and he attributed it to repositioning efforts around Black Diamond over the last few years. Part of that included a recommitment to innovation. To support that, Black Diamond now has 75 engineers and “there’s not another outdoor company close to that,” according to Walbrecht.
Black Diamond launched 45 products for spring 2018, about 55 products for fall 2018 and plans to launch 177 for spring 2019. The brand has been regularly winning “Product of the Year” awards at trade shows. Upcoming apparel, trekking poles and headlamp releases were showcased at the event in Boston.
In marketing, Black Diamond “launched heavily” into public relations and trade shows. The brand has expanded from less than 2 billion ad impressions to six billion impressions while doubling its social media reach. Further investments were made in its athlete ambassadors. On June 6, Alex Honnold and Tommy Caldwell climbed the 3,000-foot Nose route of El Capitan in one hour 58 minutes, carving more than 20 minutes off a 2017 record mark.
Finally, investments were made in efficiencies that have “dramatically” improved fulfillment. Walbrecht noted that Black Diamond’s growth recovery also reflected efforts to overcome some early hesitation by retailers to support the brand following its acquisition by Clarus Corp.
Walbrecht said, ”The retailers were telling us that we know the consumer loves the brand and we love the brand, but we’re not sure if you love the brand.”
Walbrecht said Black Diamond should fully benefit from the growing popularity of climbing as the sport’s best-known vendor but needs to raise overall awareness. Better known as “BD,” he said Black Diamond is a “super fan brand, and by that I mean it’s a geek brand” among climbers, but little known outside the climbing community. Said Walbrecht, “If you walk around the city of Boston, the number of people that know the brand is very small.”
Photo courtesy Black Diamond