The investment company that acquired Mountain Khakis last week sees no need to change the outdoor apparel brand’s growth priorities, according to an interview with one of its principals.
Kanders & Company Inc. bought all the assets of Mountain Khakis April 29 through an affiliate April 29 for an undisclosed sum from shareholders including Remington Arms Co., which had owned a 75 percent stake in Mountain Khakis since June, 2010.
Kanders & Company is controlled by Warren Kanders, who has been investing in outdoor products and other consumer and professional brands since negotiating the sale of defense contractor Armor Holdings Co. for $4.5 billion in 2007.
Kanders & Co.’s other holdings include Safariland LLC, which has aggregated a portfolio of holsters, body armor and other safety products sold to the law enforcement and public safety community. Kanders is also the largest shareholder of Black Diamond Inc., which he took public alongside Gregory Mountain Products in 2010, and where he serves as executive chairman.
Kanders added the title of Mountain Khakis chairman last week and will now work with Mountain Khakis Co-Founder and President Ross Saldarini to guide the company through its next phase of growth.
While financial details of the transaction were not disclosed, no debt was used to finance the purchase, according to Gray Hudkins, a principal with Kanders & Co.
“Not only did we not use debt to finance the acquisition, but we put in extra money to make sure that when opportunities arise they can execute,” Hudkins said in reference to Mountain Khakis senior management, which consists of Saldarini,Design Director Noah Robertson and Creative Director Jen Taylor Muhr. “We want them focused on brand and product and not stress out about not having capital to grow the business.”
Hudkins said Kanders & Co. has learned to recognize inflection points through its involvement with such authentic brands as Gregory, Black Diamond, POC and those owned by Safariland.
“Consumer awareness of the Mountain Khakis brand has grown to a point where it has legs,” said Hudkins, who ran Gregory from mid-2009 until it was merged with Black Diamond for the 2010 IPO. “There’s lots of awareness from dealers in the specialty channel and consumers. In our experience when brands get to this stage they are at a point where with proper investment, the proper resources, the right focus and management team, they can really be something special.”
The deal comes as Mountain Khakis pre-season orders for Fall 2015 are running 40 percent ahead of a year ago on strong demand for a new pant launched last fall and a small but rapidly growing Women’s line.
“You are dealing with an ecosystem in the specialty channel world where you have a lot of business owners who are outdoor and product enthusiasts,” said Hudkins. “They are counting on us to do our part correctly and to make sure when they order something it shows up and its right. If you can't make product, make it well and make it on time, you can't deliver.”
A spokesman for Remington reached Thursday declined to comment on why the company chose to sell Mountain Khakis, which thrived under its ownership.
“The Business grew almost 400 percent in the five years we were with them,” said Saldarini. “They feel really proud of what they helped Mountain Khakis achieve and we are all thrilled how it turned out.”
Saldarini said new ownership does not change priorities he outlined in early April for an article that appeared in The B.O.S.S. Report April 17. In order, those priorities call for growing sales with existing specialty dealers, growing the Women’s business and laying the ground work for overseas expansion.
“We are definitely hiring,” Saldarini said. “We will know in a few weeks whether we are going to accelerate that or stick to our plan.”
