For years Eastern Mountain Sports has been quietly doing business through its 84 stores in the Northeast and Colorado, in fact some would argue, almost too quietly. Over the past few years EMS has been described as “lacking oomph,” or “aimless” without a CEO or GMM, but the company still produced respectable results with an estimated $180 million in sales in 2003.
Late last year Will Manzer came on board as the companys new CEO with a single goal in mind add some excitement to EMS. To do this Manzer organized a select group of the EMS Management team, found a private equity partner in J.H. Whitney and decided to buy the company from American Retail Group.
“In fact I came on board with this very goal in mind this was spelled out with ARG prior to my coming on board. Actually we had the intention to do this a year prior to my joining the company,” Manzer told BOSS.
Manzer said that he was able to move a little faster that ARG had originally anticipated, thanks in large part to the help of J.H. Whitney. “They are really a unique partner in many ways. Its great that they view this from a more personal level, and truly love the outdoors.”
Manzer went on to say that Peter Castleman, who ran Whitneys end of the deal, and several of the senior partners at the company are all outdoor enthusiasts.
Details of the transaction were not made public, but Manzer said that management now owns a “significant” percentage of the company while Whitney has the majority interest. Representatives from American Retail Group were not available for comment.
Manzer has a very different vision for EMS than the current companys image portrays. Scott Barrett, EMS Chief Marketing Officer, told BOSS that the new EMS stores will all be in the 7500 square foot range and offer a much more interactive experience. Flat Screen TVs and sound systems will offer a “seamless integration” between the brick and mortar stores, the on-line store and the planned 188 page “cata-zine.”
The company will also be changing its product assortment around. Manzer said that there will be a shift in the next year to more equipment, and EMS will be “narrowly focused” on the outdoor athlete. This is a dramatic shift from the old strategy at EMS where the company was trying to appeal to a broader outdoor audience.
EMS will not be opening any new stores in new markets over the next 12-18 months. During this time Manzer and his team will be focusing on “perfecting the brand strategy of the company.” According to Manzer EMS will at the same time look back to its roots and represent a true community outdoor store, and appeal to the youth culture with a more energetic, vibrant atmosphere.
The company will also be focusing on expanding its web presence during this time. “Right now web revenues are a very small part of the business, and we expect them to become eight to ten times larger than they are today, and that is a conservative estimate. They will become 12-13% of total sales in the next two to three years.”
The number of brands sold at EMS will also be reduced. Pete Gilmore, VP and GMM at EMS told BOSS that the company will keep many of the “core outdoor brands,” like TNF, Black Diamond, Metolius, Gregory, Merrell and Patagonia to name a few, but he said, “I feel like we have too many brands and we need to simplify.”
Filling much of the floor space opened up by the reduced brand count will be the EMS brand, and Manzer is making a strong point of separating the EMS brand from private label. “We are not doing private label anymore,” he said. “Now, its called the EMS Brand. No one at the company is allowed to say private label.”
Manzer plans on taking the EMS brand up-market and position it as a premium brand to compliment the national brands on the floor. He also sees significant potential in licensing opportunities and possible wholesale distribution down the road.
EMS will also be stepping away from the promotional pricing that has plagued the company in the past. “There was a running joke that EMS stood for Every Months a Sale,” said Manzer. “We are abandoning that image.”
Manzer said that not only will the stores be re-branded, the whole company will be re-branded to resonate with younger customers and place an emphasis on developing a “visibly authoritative” staff that provided exceptional service and a strong grassroots marketing campaign.
Once the company has perfected this brand image, Manzer said that they will then begin “surgically” opening new stores in new markets. “I can see EMS becoming three and a half to 4 times the size it is today,” said Manzer.
While direct comment from Whitney was not available, Manzer seems very up-beat about the current and future relationship between EMS and the Private Equity Firm. “Whitney approaches investments with a very pragmatic attitude,” he said. “I mean, we are talking three and a half time growth, but if we find out that the right size for EMS is two and a half times the size it is today, then that will work.”
