Despite a three-year slide in global sales, Mountain Hardwear has retained the loyalty of key outdoor specialty retailers in the United States, including a few who say their sales of the brand are again growing.
Mountain Hardwear sales declined 10 percent to $119.9 million in 2014, or 15.8 percent off their peak in 2011, according to parent Columbia Sportswear Company. Mountain Hardwear’s share of Columbia sales shrank from 10.2 percent to 6.8 percent during that period, in part due to COLM’s 2014 acquisition of Prana and strong growth at the resurgent Sorel boot brand.
The numbers prompted some to question why Topher Gaylord resigned as the brand’s president earlier this month before COLM could name his replacement. On July 1, COLM announced it had appointed Scott Kerslake, president of its Prana brand, as interim president of Mountain Hardwear pending an executive search for Gaylord’s replacement. But indications are that Mountain Hardwear was gaining momentum under Gaylord, who served as the brand’s president for five years.
Mountain Hardwear’s Director of Global Marketing Chris Harges told The B.O.S.S. Report last week that much of the brand’s sales decline has been in Korea, but conceded U.S. sales have been mixed.
“From a global sales perspective, keep in mind that the brand’s second largest market is Korea, where there is an industry-wide inventory glut being worked off,” Harges wrote in an email. “In the near-term, that will likely have the effect of muting or masking whatever progress we are making in the U.S. and other markets. We have seen continued growth in our US specialty wholesale business especially around the categories of insulated outerwear and equipment.”
COLM increased its inventory reserves for Korea in 2014 following store expansions in the country in 2012 and 2013 that had helped fuel growth in sales of both the Columbia and Mountain Hardwear brands.
Losing share to sister brands
Point-of-sale data from SportScanINFO (SSI) data shows Mountain Hardwear remains among the top 10 best selling Outdoor Apparel brands in the Specialty Retail channel, but that its share has slipped four spots since the end of the 2012. Ironically, it was overtaken last year by Columbia and Prana, SSI data show. Its share of Outdoor Outerwear retail sales fell just two spots during the period.
The slide may reflect Mountain Hardwear’s decision in 2012 to decrease its distribution to some online and big box specialty retailers to rebalance sales in favor of full-price business.
“Our consumers are much more closely aligned with specialty and the promotional activity in the chain channel was at odds with what’s right for the long-term growth of the brand,” Harges said. “Through this shift and some significant refreshes to our products, we’re seeing our fastest growth with our specialty dealers.
A quick search online last week showed Academy.com, Cabelas.com, GanderMountain.com, Sportsauthority.com, SporsmansWarehouse.com and SportChalet.com offering broad assortments of Mountain Hardwear apparel and, in some instances, equipment. DickSportingGoods.com offered only a dozen apparel and accessory items, while Scheels.com offered none.
Spurning Gore-Tex
Some industry sources have attributed Mountain Hardwear’s sales decline to the brand’s decision to move away from Gore-Tex following its 2010 acquisition of OutDry Technologies S.r.l., an Italian textile company that specializes in waterproof breathable membranes. However, Mountain Hardwear has a long history of developing proprietary technology, including Conduit, which many still consider to be the most breathable, waterproof technology decades after coming on the market.
Moreover, retailers and gear geeks continue to be impressed with Mountain Hardwear’s OutDry backpacks, which launched at retail in Spring 2014. The packs, which are built from an OutDry treated fabric, have developed a reputation for being the most waterproof on the market.
“A lot of dealers were concerned about Mountain Hardwear going out on a limb by not using Gore-Tex, but Marmot and The North Face do well with their own proprietary technology and if you use Mountain Hardwear’s DryQ stuff it breathes unbelievably well,” said Mike Plante, owner of Travel Country, a Florida retailer that has played a role building the Mountain Hardwear brand online.
Mountain Hardwear developed its Q technology in collaboration with multiple suppliers.
Key dealers report rebounding sales
Plante says Travel Country’s Mountain Hardwear sales bottomed out in Spring 2014 and have been growing since Fall 2014.
“It’s nothing dramatic, but we are seeing healthy margins and health sales and fairly innovative spring product, especially on the gear side,” said Plante. “They hit some sharp price points with product that is really well built and works great and looks great.”
Plante said Travel Country’s results may be skewed by his decision to cut back its online business substantially to improve margins.
Mountain Hardwear sales are still off their 2011 peak at River Sports Outfitters in Knoxville, TN but grew significantly in 2014 and are on pace to grow again this year, according to owner Ed McAlister. He said fit, design and delivery problems hurt Mountain Hardwear apparel sales in 2012, but noted that such issues are common across the industry.
“Our sales are off their peak, but we never really lost confidence in their ability to turn it around,” said McAlister.” I’m very enthused around their new pack line, which is waterproof and at a good price point.”
Mountain Hardwear will emphasize its sportswear and equipment collections at Outdoor Retailer next month.
“Both have shown real gains over S15,” said Harges. “Our women’s sportswear line is substantially refreshed and has been getting rave reviews from buyers. Men’s sportswear is performing too and equipment continues to deliver for us. We’re having great S15 performance in our sleeping bag line and we will be building on that and growing our tent business with a line of lightweight backpacking tents. Finally, the market demand for our totally unique OutDry waterproof packs keeps growing. We have lots of new OutDry packs to show in S16 as well.”
COLM CEO Tim Boyle thinks Mountain Hardwear’s renewed focus on value will help turn things around.
“We really focused on the product offering to make sure that we had products that we call gateway products, but fans of the brand could acquire without having to spend $300 on a jacket,” Boyle said of Mountain Hardwear in February. “We’ve built products which have lower entry price points to allow consumers that love the brand to get into them without taking out a mortgage.”
Decades of goodwill mean Boyle’s hopes are shared by many in the industry.
“There is not a vendor I’ve spoken to, or a retailer I’ve spoken with, who does not want them to succeed,” said Plante.
