In 2017, Ian Widmer founded Progression Brands Group (PBG), a hybrid equity/management company whose mission is to “level the playing field for emerging brands by helping passionate entrepreneurs focus on creating something bigger than themselves.”
PBG not only invests in, but partners with and provides expertise for, up-and-coming brands working in the active lifestyle space. This includes installing a seasoned executive to join the executive team of any brand they’re partnering with to help guide that company to the next level of growth.
So far, PBG has announced one deal with Tentsile, the originator of the Tree Tent. Patricia Babka, an operating executive at PBG who was formerly director of the outdoor division at Totes Isotoner and of GM Skins USA, this past July joined Tentsile as COO.
Also in July, PBG formally announced a number of board appointments to support other deals. Beyond Babka, the board includes:
- Paul Silvertown, president and CEO of Impact Group and previous head of global sales of Canada Goose and GM of Canada Goose International AG;
- Clark Gundlach, principal of the Gundlach Group, previous SVP/GM of winter sports at Quiksilver and longtime executive at Burton Snowboards;
- Pat McIlvain, VP of marketing at Toca Football and previous VP of global sports marketing at Oakley;
- Daniel Clayton, founder of Clayton Inc., a sales agency based in New England and a former director of sales at Oakley and Anon.
Strategic market relationships have also been formed with Clayton Inc. as well as Collier Brands, a brand and design agency based in Boulder, and Moraine Sales, a sales agency covering the mid-Atlantic.
Widmer is probably best known for his time at Canada Goose, which he joined in 2009 as the outerwear specialist’s first U.S. employee and saw first-hand the benefits of having a diverse group of seasoned veterans. Helping establish the brand in the U.S. and secure a foothold in Europe, Widmer left a few months after Canada Goose’s March-2017 IPO to form PBG.
“I learned a lot [of things] from eight years working with Dani Reiss, one of which was to surround yourself with people who challenge you and bring varying degrees of perspective,” Widmer told SGB Executive.
Beyond solid business fundamentals, PBG looks to see a high level of product differentiation and a strong culture in any emerging brand the company looks to invest and partner with. Here, Widmer discusses why he launched PBG, the firm’s investment criteria and the opportunities and challenges facing up-and-coming brands in today’s marketplace.
Why did you form PBG? The retail landscape has [changed] and continues to change significantly. We believe that the paradigm shift we are experiencing positions smaller/emerging brands [with] the platform to grow substantially, because they are nimbler and able to quickly react to shifts in the consumer approach. We also know that these brands can benefit from guidance, support and coaching from industry executives that have done it before. Traditional investment groups have operators, but they are generalists and many haven’t been a part of building a brand. I wanted to create a destination for active lifestyle brands who know that when they are working with our team they are working side by side the people who helped grow and develop from an early stage many of the industry’s most iconic brands today.
How does PBG actually work with brands? As an equity investment and operating company Progression looks for brands who are seeking out more than capital. If we are going to invest, we work with the brand to determine which of our executives will be the best fit to help the founder attain their aspirations. The role the executive plays depends on the direct need of the brand; there is not a set expectation from our side. If the brand is simply looking for capital, but a very distant relationship with their investor, we are not the right partner for them, and that is OK! Our goal is to be active, but in a way that is supportive and of value to the founder through the lens of accomplishing their dreams while also creating value. We also don’t need to invest capital to be engaged. Not all brands need capital, but [all brands] want access to the expertise. Market rate for any member of the PBG team is frankly unattainable for many smaller brands, but that’s the beauty of the group; we don’t need market rate. If we see the value in a brand we are available to invest using our time to establish value. Don’t get me wrong; everyone needs to be compensated. But we are able to be creative on exactly what that looks like.
What type of brands are you looking to partner with? The core focus of our group is to be a destination for small emerging brands that have been trading for a few years, gaining traction, but are at that point in their lifecycle where every decision makes them a bit nervous because there is now more at stake. This is typically brands that are around five years old. PBG focuses in on the outdoor, fashion, winter/action sports markets, and we are not looking at start-ups, but brands that have a consumer following, yet [are] not ready for the big equity firms. We also aim to be a trusted destination for larger firms looking to expand their portfolios with brands with high value, needing to take the leap from small stage to mid/large stage. Our goal is to create a reputation for cultivating brands in a way that drives significant brand value while also developing a culture and practice of strong business fundamentals by the time our relationship concludes. That said, our access to varying degrees of capital allows for us to punch up above our weight when reviewing deal size, so we have looked and are looking at opportunities up to $100 million.
Are you looking for any characteristics in particular that may be different than a typical investment boutique? We have looked at approximately 75 brands in the past nine months, and the only constant is when a founder treats their brand like their child they will undoubtedly be firm yet humble and inevitably successful. We also know that every brand’s specific needs are different. Some have great marketing, but struggle commercially while others have great commercial success but can’t understand their financial statements. Where we see the best conversation is with the founder who is transparent and honest about what they need and their limitations. We often come across those who say the right things, but it’s a show. Those who are truly passionate about their brand, their mission and their vision are easy to identify because they have strong opinions on the brand ethos, but also know they can’t do everything alone.
What newer challenges are start-ups facing gaining traction these days? We focus on early stage brands, and while that is where the opportunity lies, so many people have entered the space. Therefore, the landscape is very saturated with young brands. As a result, for consumers and retailers the challenge becomes figuring out where to focus and how to pick. Brands really need to be disruptive and have a true value proposition like Tentsile, which we are proud to say is the first brand in the portfolio. Those challenges, compounded by the significant costs related with building a purely D2C business, or retailers looking to offset their poor performance by squeezing vendors with varying degrees of contributions, results in an uphill battle from the start. When you are an inventor or artist, you don’t know that it’s ok to say “no,” or that sometimes finding a different path than what is traditional can and will lead to success. That’s where we come in.
Why is PBG focused on active lifestyle? All the fun for equity players is Silicon Valley and tech, right? HA! Anyone reading this that sees tech and my name is now laughing. I am the guy who can barely turn on his laptop! Jokes aside, I believe investing in what you know is critical to success. Our team’s passion for this space coupled with my frustration with the type of capital options for emerging brands has fueled my belief now more than ever that Progression can be a pure platform for brand amplification, successful investment, without principle erosion. And regarding value, let’s look at Canada Goose, Oakley, LVMH, Moncler, the recent deal with Helly Hanson and more. There is plenty of value to be created. It’s knowing how to do it that’s the key … and it isn’t with only the checkbook.
Is there a set strategy or goals for PBG you can divulge publicly? This is a great question and one I get often. So first off, yes, we have a very robust strategy as a group, but we keep that pretty close to the vest. What I can say is that we don’t set specific number of deals or target deploying specific amounts of capital in a given time period. These types of pressure are what result in bad decision making. We have a saying internally, “We will be defined by what we don’t do, not by what we do.” I truly believe that. We are exceptionally disciplined when making the decision to on-board an opportunity. We are and continue to plan to be very intentional with our portfolio. So if we do multiple deals in a year that would be incredible, if we don’t do any in a year that’s ok too! The brands have to be right for us to engage, and believe me when I tell you our investors want us to be deploying capital. We are not being conservative but responsible. When a deal is right, we go all in and do so quickly. As far as raising money, we have a group of investors that we are exceptionally loyal to at the moment; without their interest and support we wouldn’t be here. At some point we will need to expand our resource capacity, so I meet with lots of interested parties and love doing so, which has resulted in a list of future accredited investors who want to be involved with us when we are able to invite them in.
Photo courtesy Progression Brands Group