Episode Transcript
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(00:01):
This just in. Breaking newsfrom the Rock Fight. In a stunning
development that has rockedcore outdoor enthusiasts from Midtown
Manhattan to Sand Hill Road,Planet Earth, the primary shareholder,
has announced its intention todivest all holdings in polyester
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(00:23):
toxic. It's not a great lookfor me to be associated with billions
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It's unknown how this willaffect larger markets, but it's rumored
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Alright, while that may not betrue, you know what is true? Ibex
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merino, not polyester. Welcometo the Rock Flight where we speak
our truth, slay sacred cows,and sometimes agree to disagree.
(01:28):
This is an outdoor podcastthat age. I'm Colin True and joining
me today, they just took out afull page ad in the Wall Street Journal
to complain about the otherRock Fight podcast hosts. It's the
Monday Boys, producer Dave andOwen Comerford. What's up guys?
Yes, I think it was time,Colin, that we put you in your place.
It was me. I mean, I knowschnitzpahn gets under your skin.
(01:50):
Oh, and don't even talk to meabout Shantae. Oh my gosh.
I was complaining about theMonday Boys moniker, but that was
a different, different ad.
All right, today we are goingto talk about Chip Wilson's Wall
Street Journal ad as well assome other headlines that come out
of the outdoor industry. Butfirst, some programming reminders.
Listen everyone, we never wantyou to miss an episode of the Rock
Fight, so please click Followon the podcast app you're using right
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you can check out that backcatalog. We have one more new episode
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should do.
More from the Rock Fight inprinted typographical form. Yeah,
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It's really more of a seminewsletter, really. I don't really
know when that's going to comeout, but Rock Fight co sign up.
And for anybody who read thisweek's edition of News from the Front
and was disappointed theycouldn't actually vote in the survey
and missed the fact that itwas obviously a joke. It was a joke.
No, no, you can still vote.
Well, that's true.
They were frantically clickingtheir email buttons. Okay, one, I
(03:17):
got two emails like.
Hey, I tried to vote butsomething got screwed up. And I'm
like, just read the bottom.
It was a cleverly appliedsatire. I believe. Joke is just a
little too blasey.
I'm sorry, I'm sorry, I'mdiminishing your work there on that.
My bad, my bad.
Yeah, Neanderthal.
Oh, and if our listeners wouldlike to reach out to us, what should
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Well, if they want to completesurveys that are uncompletable, they
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where we are Rock Fight Co.All one word and just send us a dm.
All right, kicking us offtoday. Outdoor retailers are continuing
(03:58):
to close with both Orvis andREI announcing closures this week.
Let's start with REI. So perSGB, one week after releasing their
Peak 28 strategic guidelines,REI announced this past week that
they will be closing three oftheir stores in the Northeast, including
their flagship SoHo locationin New York City. The Co Op issued
the following statement toaddress the closures. It reads, after
(04:19):
thoughtful consideration, wehave made the difficult decision
to close our Paramus, NJ storein Q1 2026 in Boston, Mass. And SoHo,
NY stores in late 2026. We aredeeply grateful to our teams, our
members and customers in thestores communities for their support
over the years. As markets andcustomer needs evolve, we must adapt
to position the co op for longterm success. We will continue serving
(04:40):
members and customers at theselocations until closing and at our
other stores across the NewYork and Boston regions. Both the
SoHo and Boston locations werepart of the 11 REI locations that
have unionized. So, Owen, REIdidn't waste any time after the Peak
28 announcement. Peak 28announcement, excuse me. And making
their first public moves. Whatare your thoughts? What were your
(05:01):
thoughts when hearing aboutthese closures?
One of the questions you askedlast week, Colin, was why now? In
terms of coming out with P28,I think now we know one of the things
was the fact that they werebasically going to be forced to make
this announcement because thelandlord for soho needed to be, you
know, basically needed to beable to market that space. And actually
(05:25):
if you went to the space, itwent to that. To the realtor for
that landlord. On the day thatthis was announced, they already
had the. The REI soho flagshipavailable for rent to go and see.
Oh, wow.
Yeah. So, you know, I'mdefinitely not shocked that this
was one of the quote, unquote,tough choices that they referenced
(05:45):
in the Peak 28 announcement.In fact, I. In my original l. In
post, I actually had storeclosures as one of the tough choices,
and I took it out because whatI didn't want to do is, was create
angst for green vests if thatwasn't what was going to happen.
You know, that's kind of thelast thing you want to have happen.
But, yeah, not surprised atall. I'm also not surprised that
(06:08):
actually it's stores in theirhighest rent areas. I mean, that
SoHo store dollars per squarefoot is probably five to ten times
higher than they pay in someof their other locations. So rent
is really high. The otherthing I think the most that's not
really talked about much iswhat I call outdoor flight from urban
areas. So you think aboutthose customers that maybe used to
(06:31):
live in the soho area who wereoutdoorsy. A lot of them during COVID
actually said, well, hey, Ican work remotely. So I'm gonna go
to Colorado or Michigan, avery outdoorsy state like Michigan,
and live by the lake and havea great time.
And.
And they didn't come back postCovid. So I think a number of those
aspects, diminishing outdoorsycustomer base, combined with increasing
(06:52):
rent and increasing laborcosts, especially in those urban
markets, really undercut thefinancials of those stores.
What do you think this meansfor the union? Because when you look
at kind of some of the thingsthat I think I've said on the show
and people, if you're criticalof maybe the union efforts, it's
more because it's like, well,you're unionizing a retail store.
I understand what you'reTrying to protect here, but also
(07:13):
if you don't like where youwork, go get a job at another retail
store kind of thing. When youthen lose, like these two, like the
soho shop has been a big,played a big role in the union efforts.
I think it was the first,wasn't it?
I think it was, yeah. Or oneof the first, at least.
Right.
What do you think this meansfor the union going forward?
Well, it's certainly not goodnews, right? I mean, You've only
(07:34):
got 11 stores today at 195,two of them are closing. So it undercuts
the base that you haveunionized to begin with. I think
secondarily it potentiallyintroduces this pall over the unionization
efforts. Like, well, if weunionize, are they just going to
close us? Which I'm notsuggesting, just to be clear, I'm
(07:55):
not suggesting that that waswhy REI closed these stores. I know
that that has been suggested,you know, out on Reddit and all of
those other corners of theinterwebs, but I actually don't think
this was a, was, was a unionbusting move. I really do think this
was very financially driven.Now, part of the financial aspect
may have been the fact that,you know, that the union was driving
(08:18):
wages up and doing otherthings that made the stores less
financially viable, but Idon't think that was the main effort
here.
So before these closures, REIhad 195 locations and they're still
open. So they stilltechnically do have 195 locations
until they close. We don'thave the insider knowledge to truly
predict how many more they'llclose, but I doubt that this will
be it. Any thoughts on howmany more they may shutter?
(08:40):
I think it's really going tobe a lease by lease, case by case
discussion as these leasescome up for renewal. So, for example,
it isn't just totally bychance that the Soho store is closing
after 15 years of being open,because that's probably the initial
10 year term, plus they did afive year extension and now they're
(09:03):
like, okay, the lease is up,we're moving out. Right. So I think
as a lot of these stores comeup for renewal, there's going to
be those discussions. And Ithink especially some of these higher
priced urban stores are theones that are going to be more closely
scrutinized or maybe are intougher ways. And it's going to be
a financial decision. It'sgoing to be, they're going to look
at the hurdle rates that theyexpect from these stores and if they're
(09:26):
not driving those numbers,they may have to close. One thing
I would say is that actuallyclosing some stores gives REI more
leverage with their landlordsto basically say, hey listen, you
know what, we're not afraid toclose the store. If you're not willing
to work with us on rent orpaying some more tenant allowance
(09:47):
ta to refurbish the store andbuild it out to our new level or
what have you, we're going towalk. And so, you know, I think the,
the reputation for REI ishistorically from a real estate perspective
has been, you know, the kindof the nice guy. I think we may be
seeing a touch of the no moreMr. Nice Guy here and taking more
(10:07):
of a aggressive, maybeaggressive is the wrong word, but
attitude towards, towards realestate. Something that I saw for
example, like at Dick's, forexample. I mean they take no prisoners,
right? They're going to pushfor the best possible deal from that
landlord. And you know, it'snot about, you know, singing Kumbaya.
It's like, hey, we need that.We need to get the best possible
rent and tenant allowance.
(10:29):
I was gonna say how much ofthis actually in a sense has nothing
to do with REI in that againwe're talking about just the new
urban, like you said, kind oftraffic patterns in there, the shopping
patterns. The idea ofabandoning say soho or Boston seems
to me crazy from a brandperspective and just kind of being.
(10:50):
You don't be relevant inpeople's lives by moving away or
retreating. But could we seesmaller footprints or pop ups or
just a little more use of thatto keep the in places that we know
that they're viable. But maybethis, this big super sized model
doesn't work.
I think that's a great point,Dave. And that's actually what a
number of other companies havedone is where you know, the suburban
(11:13):
model is 25,000 square feet.In the res case, maybe they have
a 10,000 square foot sort ofmini model that can be in those urban
areas. I totally see that as apotential way to go. And the SoHo,
you know, it's a, a beautifulstore. You know, it's, it's like
a, almost a city block. I meanthis thing is, is amazing. Huge build
(11:35):
out etc, I'm sure very highrent. They could still have that
position, you know, in, in aSoHo in Manhattan or what have you.
No, you know, and what, whatis the like Tribeca or whatever they
could have, they could have astore there that's much smaller that
still gives REI that presencein that market, but without the huge
(11:55):
Overhead.
I think the Boston one's theone. And maybe I'm a little biased
because that's used to be myarea. But, like, that was that shop
I did clinics in for smartwoolin the mid 2000s. Right. And that's
a spot where you have. You'rekind of halfway between the fells
of the north, the blue hillsto the south, and also Boston. The
whole New England area justlost a shit ton of EMSs. So this
really hurts. I mean, the SoHoone as well, I think it's a little
(12:18):
more in terms of, like, how itaffects the enthusiasts in the area.
But here's another NewEngland, you know, outdoor store
going away.
I think they just. They didn'tmerchandise properly in the Boston
store. You had all those greenvests. Just slap some Celtics logos
on them and dude, those thingswill move. Big mistake.
Move.
I bet you Dick's house ofsport is moving Celtics jerseys.
Like, come on.
This is kind of what I'msaying about the industry. You guys
(12:39):
are like, oh, we can get AlexHonnold. Like, no, can you get Tom
Brady? That's like that you'rein Boston. Like, who do you think's
going to.
Show up, you know, have AlexHonnold climb? Tom Brady, Right?
That would be free.
Solo Tom Brady.
Right? There you go, Dave.
You know, how many Sierras doyou think open in the wake of these
vacated reis?
I think it's a three to oneratio, Colin. I think we actually
(13:01):
have proven that, that forevery. When you push your thumb down
on an rei, three Sierras popup someplace else.
It's like, you know, you'd sayCandyman three times or whatever.
He shows up. It's kind of right.
It's more like Beetlejuice,but whatever.
Just one of those. All right.Well, Also, according to SGB last
week, Orvis will be shuttering36 retail locations. Simon Perkins,
the current president of the169-year-old fishing brand, said
(13:24):
in a statement, quote, like inMcManian retail, Orvis's business
model faced a sizable shiftwith the introduction of an unprecedented
tariff landscape to ensure adurable brand and model for decades
to come. We are focusing onour core strengths and making the
difficult but necessarydecision to rescale the business
by tightening our assortmentand reducing our corporate store
footprint. So, Owen, is thethrough line here between REI and
(13:47):
Orvis simply that they grewtoo much and that there are fewer.
That fewer shops had a tighterproduct directive is simply more
sustainable for the future?
Not necessarily. One thing Iwould like to say is that Blaming
Orvis's current problems onthe tariff landscape. I'm not buying
that.
Is that convenient maybe? Isthat convenient the word you're looking
for?
(14:07):
It's an excuse, right?Because, I mean, believe me, I am
not a fan of tariffs in anyshape, manner or form. And I think
it's awful policy. But Orvis'sissues go back way before the tariffs
were introduced in April. Infact, you know, they started their,
their layoffs and they laidoff like almost about 8% of their.
(14:30):
Of their labor force inOctober, which for those that are
following, was way before the tariffs.
So last, Last October. A year ago.
Yeah, a year ago, exactly. So,you know, so, so, so yes, tariffs
aren't helping. I get that.But that's not really what's, what's
happening here really. I thinkwhat happened with Orvis was they,
they just got out way overtheir skis in terms of. They got
(14:54):
way too far away from theircore. Right. So Orvis, an amazing
brand, been around for, as yousaid, for almost 170 years. And at
its core, they are an angler'sbrand. Right. They create the, they
have the equipment, they havethe apparel, etc. And it really just
got watered down to a wholebunch of lifestyle stuff. Right.
(15:15):
And that's not even lifestylelike we talk about, like angler,
angler, core. Now this is the latest.
We talked about that before.
That's the thing, apparently.Right. So you would think that's
great for Orvis, but thereality was is they just started
producing a whole bunch oflifestyle apparel that had zero to
do with, with, with, you know,with fly fishing. I mean, you know,
(15:38):
flannel shirts, khaki pants, Imean, you name it, had nothing to
do with, with, with fly fishing.
More like an Eddie Poweroutlet store kind of.
Exactly. It could have beenfrom anybody. Right, right. But,
but just, just cost, you know,twice the price of, you know, the
same generic product fromsomebody else. So that, that's really
(15:59):
what hurt Orvis. And what thisis about is them getting back to
like, okay, oh crap, we gottaget back to our roots, get back to
developing new product aroundour core. So they'll still have apparel,
but it won't be genericlifestyle apparel. It'll be apparel
that's actually related to flyfishing. So that's what's really
(16:19):
driving Orvis, I think, to tryto say the Orvis and the Rai thing
are the same issue. I wouldn'tnecessarily say that. Yeah.
Well, Dave, to that point, thebig picture talk of the industry
as of late, including a lot onthis podcast has been the potential
for a much more casual futureas it seems that for Orvis, the future
is probably a little bit morerooted than their core customer.
(16:41):
Is there maybe some hope therefor the core outdoor fanatics out
there or is this more of a oneoff situation?
I don't see this as an issuebetween core activity and lifestyle.
I think, Owen, you hit on itmore. It's about generic lifestyle.
It's about that they produceda bunch of stuff that has no differentiation,
no specialness, nointeresting. I personally think that
(17:04):
flannels and fishing are act.That is a performance gear for fishing.
So bring it.
But casual can look like your brand.
Well, and there's no look attheir brand and their branding and
their messaging. It's just, ithasn't changed in 170 years either.
I mean, you can probably getsome kind of like brain tonic along
with that and kind of amedicine show aspect with your fishing
(17:26):
gear. But no, I mean, look, ifyou're going to one arm it, you're
going to half try and you'regoing to produce stuff that looks
like Eddie Bauer and you'regoing to produce imagery that like
we have talked about is justsedate and the same thing over and
over and completelyforgettable. What do you think's
going to happen? You're goingto spend a bunch of money on inventory
(17:47):
that doesn't move and that'sRight. And so it's like you've got
to at least try tocontemporize the way you sell and
your message, even if yourbrand is based on heritage.
That's a really good point anda little bit of a nuance we probably
don't address overtly in theseconversations, at least here on this
podcast. Right. Where when wetalk casual that might, that may
paint a different picture insomeone else's head than me than
(18:09):
what you're thinking. Likecasual doesn't have to be, you know,
boring or generic. Right. Itcan just be like it could be completely
on brand for who you.
Are and in this case andinteresting and differentiated.
Right?
Yeah.
And in this case it feels likeOrvis. Yeah. You're just kind of
like a lot, a lot of otherthings out there. There's nothing
that's very orvisy about whatyou're doing. Right. So that's an
opportunity for you.
100%. And I would say thatfor, for the outdoor brands that
(18:32):
are there, like, like, youknow, Fjallraven sponsor the podcast,
there's a brand that has, Ithink lots of, you could say lifestyle
product. But it's all inspiredby their, their, their, their outdoor
collection. It's usingmaterials that they've used historically,
whether it's the wa or otherelements that make sense within that
(18:56):
brand and the outdoor ecosystem.
It's a design language.
Exactly.
When you look at a piece fromor look at a collection from Fjallraven,
you can tell where it camefrom. And so they can still be modern,
they can still stretch and usenew things, but you always come back
to something that has a pointof view. And I think that's where
brands like Orvis, and they'renot alone by far. In fact, they're
probably in the majority thathave no true design language.
(19:19):
Guys, this doesn't mean wedon't have to do the Fjallraven read
later now because we justgotta knock that right out there
now.
I wanna do it, do it in.
An accurate this part of theconversation not endorsed by film.
This is a pure editorial.
Yeah, that's right.
All right, we're moving out ofbrick and mortar retail and into
online outdoor retail. Lastweek, Allgear Digital announced a
(19:42):
new partnership withBackcountry. Allgear is the owner
of outdoor media outlets suchas Gear Junkie, exploresWeb and the
Inertia. And according to apost By Adweek On LinkedIn, AllGear
Digital CEO Eric Fung saysthat this move represents one of
the first formal mediaretailer collaborations in the outdoor
category, leveraging Allgear'scontent and advertising expertise
(20:03):
while complementingBackcountry's retail strengths. Owen,
a few weeks ago we talked hereabout Backcountry in the pod after
they had acquired a few Oregonbased cycling retailers, that things
have been kind of quiet on thebackcountry front sort of from the
CS since the CSE acquisitionlast year. So what do you think this
move means for the rebuildingonline retailer?
(20:23):
One of the things that Ipredicted early on with Backcountry
was that they were going to godown a marketplace model. And simply
because basically that's themodel that CSE has used in a bunch
of their other portfoliocompanies. What this may, you know,
may be is them basicallysaying, hey, we looked at, we looked
at Marketplace, the financialsdon't work basically because it costs
(20:47):
us as much to acquire acustomer as we would get in commission.
So maybe this wholemarketplace model doesn't work, but
we still really need a way tomonetize our traffic beyond what
our direct sales would be.Right. And so this is the way to
do that, to basically earnMore money because it is, I can speak
from experience here. It istough to make money in an online
(21:08):
environment when you'reselling other people's brands at
those kinds of margins becauseof all of those customer acquisition
costs that are getting moreand more expensive as you're competing
against the brands. D2Cagainst Amazon, yada yada. So I think
that's what this is. It'sabout monetizing. And I think we
should maybe explain a littlebit what they're talking about here
(21:31):
with this whole media network.So recently in the last five years
or so, retail media networkshave been all the rage across E commerce
sites that have sufficienttraffic. So Amazon was really kind
of the leader, but thenWalmart, Target, Best Buy, etc. And
it allows them to bring in allthis ad revenue in addition to the,
(21:53):
to the product revenue thatthey have for ads, whether that be
banner ads or sponsoredlistings or all these other things.
Right. So it's a great, greatprofit driver for the, for these
companies. I think thechallenge for, for backcountry is
they're also pretty expensiveto set up, to manage to figure all
this stuff out. You know,billing payment, all that stuff is
a big pain in the ass. So whatworking with all gear does is it
(22:18):
lets them plug into all thatwithout a whole bunch of cost and
lets them plug into theadvertiser network that Allgear has
already created. So I mean youlook at all those folks that are
all over gear junkie, youknow, Toyota ads, you know, come
to Illinois, whatever,whatever, all these different ads
that are on there, those adsnow could potentially show up on
(22:39):
backcountry. And you know, oneof my big questions when I posted
about this on LinkedIn isokay, is this going to be an open
or a closed network? And whatI mean by that is an open network
means anybody, well, anyapproved advertiser could advertise
on backcountry with an ad thatlinks away from backcountry, which,
(23:01):
you know, from backcountry'sperspective has pluses and minuses.
If some, you know, they've gotthis traffic and then they end up
having someone leave they,that cost them potentially a sale.
Or is it a closed networkwhere basically people can only advertise
on backcountry who are alreadybrands on backcountry and then when
they click on the link itlinks to their page on backcountry,
(23:21):
you follow? So what we heardfrom an executive of backcountry
is it's sort of a hybrid.Basically if you're an existing brand
on backcountry, you're alreadypaying for those placements through
their co op or their MDF fundtype model. And you're going to continue
doing that and it's all goingto be a closed model within backcountry
because you know they want touse those co op funds for you to
(23:44):
spend money for people to buyon backcountry. Makes sense. But
then if you're a non, ifyou're not a backcountry brand or
maybe not in the sort of thoseproduct categories, you're an auto
manufacturer, let's say nowyou are part of this open model to
where you know, you might. Ifyou're scrolling down a search results
page on backcountry or productpage, you may see an ad for whatever
(24:08):
Subaru Outback.
You know, Owen, this issupposed to be retail media is like
going to be a hundred billiondollar market by next year. I mean
this thing is so alreadyaround us and it's really just like
an extension of your in storemarketing programs. Right. It's just
now taking place online orcatalog placements. Right. Buying
(24:30):
ads in your catalog, it's justkind of bigger. But I think open
versus closed, I think thetargeting data is just way too juicy
to not indulge in. And so theclosed model of being able to see
where people are going,popping up an ad that helps stoke
that along. I think that'sgonna be the real play for backcountry
(24:51):
here. And again usingAllgear's infrastructure and kind
of the already built set upthe network to get them closer to
that, I think that's gonna bethe real play for backcountry and
for brands to. I saw a studyabout Kroger doing this on their
sites a while ago and they sawlike with a snack item they saw like
(25:12):
a 30% increase in sales andlike a 5 to 1 Rojas improvement in
a very short amount of time.So I think that just kind of leads
you to where their thinkingmight be in terms of what the real
purpose of this is, is to getyou to that sale probably prompted
by that brand. Even fasterwithin the. Within the site experience.
(25:35):
Sorry. It'll be interesting tosee if they do start a sponsored
listings program as part ofthis within the closed program to
where if you search on women'sfleece jackets, you know, is Patagonia
going to spend on this networkoutside of what they're already spending
through, through their co opfunds to boost, you know, their jacket
up to the, to the top row.
(25:55):
Right? Right.
So could that backfire at all?I mean, just thinking from the consumer
point of view, we're talkingabout like the way what people are
shopping for in these, goingto a bad country or whatever and
the experience of the shoppingfor it and the options you have to
buy all of the same stuffonline and other places. I'm on the
record on this podcast, theGear Junkie. The All Gear model of
(26:18):
how they roll out their ads isnot a pleasant experience on their
websites. I would happily givethem that feedback if they want to
come on the show and talkabout it. Their websites are not
an enjoyable.
Colin. I just want to sayanything though that we're bringing
up a grocery store chain orwhose model is like cnet and Best
Buy. Like it doesn't give me awhole lot of hope for the consumer
(26:38):
experience.
So that's what I'm getting at.Right. Like while you guys were chatting,
I just popped ontobackcountry. I immediately got two
pop ups. Do you want 20% off?I clicked no. Hey, do you want 15%
off? I clicked no. You knowthe experience already and I don't
know if this is alreadyhappening with All Gear. Not great.
And you're talking aboutthings where if I'm going to backcountry,
things I'm going to go tobackcountry to shop for. I know that
I have lots of options to gofind somewhere else that maybe I'm
(27:00):
going to enjoy that experiencea little bit more versus like a Kroger
or a grocery store where it'slike, this is a necessity. I'll just
kind of, okay, I'll get myAdvil and get it delivered or whatever
it is that I'm doing on thatwebsite. So is that a. I feel like
that should be a realconsideration here, how this gets
rolled out to the people youwant to attract to your site. A lot
of talk here about how it'sgoing to work. But what about the
people who you need to bringin and actually click purchase?
(27:23):
Yeah, well, I think that's agreat point, which is if these ads
do click away frombackcountry, I think it's important
where you put them. So it'sone thing, for example, like if you
put an ad on your homepage,which I doubt that they would do,
but that's like, oh, yikes,okay, you could lose somebody right
at the beginning of thepurchase process versus let's say
on the thank you page, they'vealready bought from you and now you're
(27:44):
going to get an ad. Okay, youBought the product. Hey, now let's
try to sell you some gear,insurance or whatever. Right. So
I think that will be aconsideration. Also just the ads
themselves and you know, arethey, do they make the site look
(28:06):
adsy or are they more in line?
Are they intrusive or they'repassive? Right, yeah.
And then I think the bigquestion for me is like, let's say
if you go down the sponsoredlistings route is are you undermining
the, the kind of the expertelement of the brand's credibility
with the consumer by basicallysaying, hey, listen, we're not just
(28:28):
gonna, we're not gonna serveyou what we think is the best product
that fits this need that yousearch for. No, no, no, we're gonna,
we're gonna serve you thesesponsored listings first. So, yeah,
it could be tricky.
I think we could just allagree that the romance of the outdoor
retailer is alive and well in2025 based on that conversation.
Right, well, hey, you gotta,gotta make a buck, Colin.
(28:50):
All right, it's time for thelightning round, guys.
Lightning round.
And we're starting thelightning round with water bottles.
As SGB reported this week thatHelen of Troy, owner of brands like
Osprey and Hydro Flask,incurred double digit losses in its
fiscal second quarter, withmost of that loss being attributed
to Hydro Flask. Oh, and howmuch of this for Hydro Flask was
(29:12):
poor strategy or how much ofthis is just the tired water bottle
category?
That is a great question.There's definitely, there's definitely
been. Thank you. And cut.
Oh, my gosh.
So there's definitely beenpoor strategy as we've talked about
in this pod from hydrofrask,you know, the prior CEO or whatever,
(29:36):
talking in excited terms aboutthe fact that they were going to
be in Costco and in Target andall these other things. And then
major backlash from yourexisting, your existing, especially
retailers who got you herebasically saying, oh, that's cool,
we love that for you, butwe're basically just not going to
order your product anymore.And oh, by the way, one of the major
(29:58):
reasons why they said thattheir sales were off so much in this
last quarter was because theyweren't getting replant orders from
their, from their retailers.So none of this is shocking. I think
the question becomes, though,is sort of which came first, chicken
or the egg? In other words,was it the overall slowdown in the
category or, you know,shifting tastes for going from Hydro
(30:20):
Flask to the next hot thing,which at the time was Stanley, and
that drove sales down and thenthey got a little Bit desperate and
went after Costco and Target.So I think it's, it's more that piece
of it. But it all, you know,kind of rolls together into not a
great place for hydro flask tobe right now.
News flash, okay. Like waterbottles, they are a trend driven
(30:41):
commodity accessory. If youare not playing to trends, if you
are not making yourselfcontemporary and modern and new and
interesting, you are going tofall off the shelf and become a price
point item. And that's whatthey have done. And so all of those
other self inflicted woundsjust accelerate this. But you know,
sometimes, I mean if you go toall of their, their channels and
(31:04):
their site and you know, yes,a lot of people holding a hydro flask
that holds liquid, we gotthat. We are so clear that's what
you do. So maybe we spend moretime creating things that are interesting
or entertaining or take mealong with a storytelling. But if
I see just one more handholding a flask that water goes into,
(31:25):
I mean it's like, goodnessgracious, this isn't hard. The fact
that Stanley came around isnot because their branding or story
was so unique. It was just anew story. And then there will be
a new story that comes aroundand they will make the same mistakes
and they will think color isgonna save them for everything and
it's not. You're a fashionbrand. Good for you. You have great
(31:47):
colors. That's exactly what Iexpect from you. But give me more,
please.
And that's been the rock fightlightning round. Okay.
All right, next up, lightning.
Lightning. Okay, sorry,lightning striking there.
It's slow motion lightning.
Yup.
All right, next up, risingtrail running brand Mount to Coast
added a new model this week.The H1 introduces the Circle cell
(32:09):
midsole which is designed toboost longevity by 90% while being
made from 100% renewablefeedstock. Dave, if you could put
aside from the fact that youloathe a brand name that is also
a phrase, what could truesustainability and running shoes
mean for what is probably thedirtiest category the outdoor industry
has?
Colin, let's be clear. It'snot just a phrase, okay?
(32:29):
It's an elliptical side. Okay.
It's an elliptical,prepositional or directional phrase,
okay? And it's where the fromis implied. We farm, defeat, seed
a summit. They're all playingin this highly literal game. But
it's not just the, the grammarthat rubs me wrong. It's the fact
that it's a bullet point to amarketing or product brief. So there,
(32:49):
let's just be clear. So we'renot. Was there a question in there?
Yes, sustainability. Well,dude, haven't you heard? It's the
future of innovation. I mean,it's like, yeah, this is again, an
expected thing that we should,we should hold our brands to that.
That is the next kind of, youknow, frontier of how are we going
to innovate. And clearlythere's a lot to work on in footwear
(33:13):
to get there. So the fact thatthey're this leading, leading brand
that position themselves, thatand it from. I haven't tried the
shoes. Colin has tried theshoes, but I haven't yet.
No, this is the one. This isone of my blind spots. I need to
try.
Oh, okay. But, you know,obviously very well reviewed people
seem to dig them and they'rebringing something to the fit story
that others aren't. But no, Ithink, like I said, this is expectation.
(33:35):
I mean, design wise, they.They look like on with maybe just
more syllables and moreletters, but it's essentially an
on.
They're definitely taking thearc' teryx path to success of like,
we're just gonna circumventeverybody else and go right to the
top.
Right, right. Which is great,but, you know, sustainability, absolutely.
That's. Like I said, we shouldbe expecting that. That shouldn't
(33:56):
be new, but good for them. Andmaybe it'll make some opportunities
for some more ellipticaldirectional phrases, you know, like
plastic to protein or, youknow, toxic to trail, I don't know.
But there's something in therethey can get to the next mold to
boast, I don't know. But thereyou go.
All right, last lightninground story. According to WWD.com
(34:18):
women's outdoor apparel brandHalf Days has closed a $10 million
Series A funding round. Owen,what do you make of this?
Quite frankly, I was blownaway by this because I work with
a lot of emerging outdoorbrands and the fundraising market
for outdoor consumer brandshas never been harder from, from
what I can see. So for them togo out and secure 10 million is beyond
(34:41):
impressive, Just great. Theother thing that it tells me is,
I mean, I've obviously heardof Half Days. I didn't think it was
huge though. But if they'reraising $10 million, that means the
valuation is likely in aboutthe 40 million dollar range. Okay,
so if their valuation is 40million, that means, again, these
(35:03):
are all guesses and roundnumbers. But they've got to be doing
close to 20 million in salestoday, which is not nothing. And
they must have a line of sightto 100 million to make a $10 million
investment. Make sense. So,yeah, so apparently things are, things
are taken off there. It's alsoimportant to know this is a by women
(35:24):
for women brand, which youknow is. So we need, we need more
half days in our industry. Sojust kudos. This is, this is really
great news.
They're definitely of though,of the upper crust though. I mean
there's a lot of there, thereare many by women for women brands
that are also pretty dorky.Right. And they are not. I mean stylistically,
(35:45):
they just, they make it lookeasy. The mountain ready performance
fashion, like no, they'rejust. That is a well, you know, well
scripted brand in terms of theway the product meets the brand.
And so I think that's anotherreason for that success. It's just
they've definitely created it.
All right, let's take a quickbreak to hear from some sponsors
and then we'll be back withmore headlines. All right, this one
(36:08):
is for all the gear makers outthere. The biggest barrier for killer
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(36:29):
You guys know Ripstop by theRoll. Dave, you've been on, you know
you're a fabric.
This is, this is. I'm, I'm,I'm reading along with you and I'm,
I'm excited to know what thewhat. Ripstop by the Rock Rollers.
These guys are cool. Sothey're your one stop shop for the
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(36:50):
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They know what they're doing.Ripstop by the Roll simply wants
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they got you. If you're readyto learn more, you head to ripstopbytherolle.com
(37:12):
to connect today.
And just so that we're clear,they have more than just Rip Stop.
Oh no, he for he forgot tomention that it's only Ripstop. That's
all they have. That's right.That's It. That's right.
It's one little square.
All right.
Doesn't rip though.
It doesn't rip, but then it stops.
That's exactly rip stopfleece. Right? They have a rip stop
(37:33):
membrane, right?
No, you got it.
That's interesting.
Okay, cool.
Hey, guys. Winter'sunpredictable, right? Mild one week,
freezing the next. I grew upin the mid Atlantic. Every inch of
snow was exciting until itmelted into a soupy mess. And then
make things worse, it wouldrefreeze. You slip across it while
you're walking across thedriveway. Oh, and you know what I'm
talking about. You live inMichigan. I don't need to tell you.
(37:55):
And when that happens, goingoutside becomes its own adventure.
Including choosing what towear. That's why people have trusted
Fjallraven jackets for morethan 50 years. Born and tested in
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Gore Tex jacket to theexpedition pack down hoodie, you'll
(38:16):
find something to suit thewinter conditions you know are on
the way for your neck of thewoods. And hey, retailers, if you
want to see the best winterjackets you should be carrying in
your shop, schedule anappointment with Fialraven at Goa
Connect in Kansas City thisNovember. The rest of you just head
to fialraven.com and don'tfall down on your icy driveway. That's,
you know.
Yeah.
Yeah.
(38:36):
All right.
Lastly, today, the Rock fight.Today presented by Lems and Adventures
calling. Are you ready to answer?
No. No, Colin, they're just.They're going to ghost you.
Don't.
Don't let him call.
All right, moving on. No.Coming early November, Lems is dropping
a bold new lineup ofminimalist boots and trail shoes
built to go wherever theseason takes you. You got to meet
your new trail companions.Here you got the Trail Thrasher,
(38:58):
the Trailblazer Mid. Each ofthem engineered with tough, full
rubber outsoles for seriousgrip and design with an urban edge.
They're made to moveseamlessly from rugged backcountry
tracks to city streets.
Can I interrupt here for asecond? Of course. In the current,
current era of, you know, GenY terminology, should we really be
(39:18):
calling something theTrailblazer Mid? I mean, it's just
like.
That's a great point.
It's the Trailblazer.
Meh.
It's eh.
Right. Mid should probably beeradicated from footwear terminology
at this point.
Exactly.
Well, wouldn't that be theTrailblazer Meh. That's not the mid.
Yeah, exactly, but.
But it's not.
(39:38):
It's an amazing shoe, butsaddled with a meh name. I'm just
saying.
I hate to do this to you, butfor someone who just cited Gen Y,
maybe the mid meh conversationshould be a little bit over there.
That doesn't make him wrongthough, because my kids say mid all
the time. That's mid. You'rebasically saying your shoe is crummy.
You're right. So what are wegoing to call it? The Trailblazer?
(40:03):
Not quite as high as the low.
Yes, exactly. That. That isexactly right.
Okay, okay, okay, I see that.
Well, the Trail Thrasher andthe Trailblazer. Not too high, bro.
Are just two of the manystyles hitting the LEM's lineup soon.
Just the latest additions tothe lineup of best fitting shoes
you've ever worn. And hey,retailer again to you. If you want
to go see the lem's team, youcan see them at Goa's Discovery Marketplace
(40:25):
at the Connect show in KansasCity this November. Hey, everyone,
before we keep going here, Ineed to tell you about our teammates
at Darby Communications. LikeI've been telling you, if you run
an outdoor, an endurance or anactive lifestyle brand, there is
no better PR and digitalmarketing belay, partner or drinking
buddy than Darby. They canhelp your business reach new heights
and they might just keep youfrom falling on your ass. Since we
(40:47):
started working with Darby,more and more people, and this is
an important point now. Guys,I want you to hear me on this. More
and more people have reachedout to us here at the Rock Fight
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they can help us, they canhelp anybody. Hit them up@darbycommunications.com
do it today. All right, acouple more stories for today. A
(41:08):
few weeks back, we talkedabout the state of Under Armour here
on the Rock Fight. And thispast week, another player in the
outdoor and active world isbeing compared to UA's trajectory
as analyst Randy Koenig isdrawing comparisons to the factors
that led to Under Armour'sdecline to Lululemon. In his analysis,
Koenig said, quote, UnderArmour's 1525 decline driven by share
(41:28):
loss, fashion shifts andstrategic missteps is very similar
to Lulu's current issues ascompetition intensifies. Moreover,
Lulu's sky high sales andmargins relative to mall average
and peers show substantialdownside risk ahead. And then, as
if that weren't enough for theVancouver based brand, its founder
Chip Wilson took out a Fullpage ad in the Wall Street Journal
(41:51):
to publish a letter detailingwhat he believes is leading to a
lesser than Lulu and callingfor a quote, revitalized board of
directors. I mean. Oh, andDave, what do we make of all this?
I mean it's definitely havingsome struggles, there's no doubt
about that. The stock isactually down over 50% this year.
So it peaked earlier this yearat 50 billion in value and it's down
(42:14):
to about $22 billion today.Woof. Now Chip, you could understand
why Chip's a little bit tickedoff because he still owns 8.4%. So
that drop has cost him a cool$2.3 billion.
I have a question for youthough. So obviously he has incentive
(42:34):
to not be happy with whatthey're doing. And he certainly knows
how to say shit that gets sideeyed attention. That is kind of his
power.
He certainly does.
Right. But how does this playin the boardroom? How does this really
play?
Well, they're gonna revitalizethemselves, right. They're just gonna
take hear what he says.
Cause clearly he's voicedthese, these opinions to them at
(42:54):
some point. Right. So it's notnew to them. So what is this, what
does this do to the, to the board?
Board and the executive teamare just like kindly off. I mean
really, it's like we haveenough, we have enough shit that
we're dealing with right now.
Like we're not aware of the decline.
And you're gonna, you're gonnacome in for sniping from the sidelines.
(43:16):
Let's face it, this wholething, Chip has been pissed off since
he, he was pushed out. Right.He didn't just leave, he was pushed
out back in 2013 because he, Imean he just. Yeah. Some of the comments
he made were.
He made some things, he madestatements to the press. Exactly.
And then over well, and thenhe made those statements and then
he doubled down on thosestatements. I mean it was really
(43:37):
bad. But he's been pissed offever since that. Right. And so I
think actually he's just beenwaiting for his. Part of the problem
he's had since then is Luluhas just been a rocket ship since
he left.
Since he left. Right. That'sthe thing about this.
And so even, you know, even at50% down from its high, it's still
worth probably 10 times morethan it was when he left in 2013.
(44:01):
So he's just been waiting forhis chance to basically say, you
know, to take his shot. And ofcourse in his letter he talks in
his ad rather he talks aboutbringing back entrepreneurial ownership
onto the board. Now, who, whocould he be referring to there?
(44:21):
You don't think he's talkingabout Chip Wilson, do you?
You know, you might havesomething there, Khan. I think it
is. I think Chip Wilson wantsback on the board.
So, so, so is this, is this anopening salvo in a larger proxy fight?
Perhaps?
Potentially. I mean, he doeshave 8.4%. That's, you know, not
enough to, to force ithimself. But if he could, if, if
(44:44):
he could get a proxy fightgoing and get, get the shareholders
to vote, being put on theboard, I mean, certainly other activists,
investors have made moves inthat regard with far less equity.
So, sure, this could be theopening salvo, especially if he can
get some of the otherinvestors on his side to say, oh,
(45:05):
no, no, we want to get Chipback on the board to right the ship
here.
I mean, it's just, okay, takethe chip part of it out of it. I
mean, the decline's real.They're struggling. It's a much more
competitive space with all theattention going to Vuori and all
these other brands who arekind of entering the space. Is it
as simple as saying you gotto, you know, kind of similar to
what we talked about earlierwith Orvis and some other brands
(45:25):
we've talked about with, like,hey, got to tighten up the line,
got to take a look at whatyou're doing, get back to the basics.
I mean, isn't that sort of theplaybook here?
It doesn't mean that hiscriticisms were wrong. No doubt about
it. I mean, the Disney thingis rough.
The other thing I would say iswhat you're seeing in the decline
of the stock price is more abursting of a bubble where they were
really had just really anoutsized valuation relative to their
(45:49):
size. So it was more of thatthan it was like that. They've gone
majorly sideways because theystill have great margins. The problem
is they're not growing. Itused to be quarter after quarter
they were growing 20, 25%, andit was like, man, they were just
(46:10):
a rocket ship and they've justhit a wall. And so now, basically
they're flat to maybe down 1or 2%, kind of with the rest of retail,
still good margins, et cetera.But. But, yeah, I mean, they've hit
the wall, and so the bubbleburst. And now I think they've been
overly penalized because ofthat. They're still a great company,
still lots of customers, somequestionable things. The Disney collab.
(46:37):
I mean, come on, what are wedoing? People but when it's house
money, you.
Do shit like that, right? It'slike, hey, we'll do that. Let's do
that. That's not coming forHOKA eventually, right? Eventually
we're going to be like, oh,hoka. Finally it's going to happen.
It happens to everybody.
I mean, HOKA might even comeout with, like, a loafer and something
crazy like that. That wouldtotally imagine that.
Wait a second.
(46:58):
But. But no. So thefundamentals of Lulu, I think, are
pretty solid. But, yeah, theyhave to just get back onto the growth
engine piece. And cutting toget to growth could be tricky, which
may be what has to happen herea little bit cut off. Cut some of
the herd with some of the badretail that they've added. Cut some
of the product that has maybediverted them from their core ET
(47:23):
but yeah, it's still a great company.
It's going to be hard though,right? I mean, everybody's just kind
of caught up. I mean, youstart off, it's them and Athleta.
They kind of leave Athleta inthe dust and do their own thing.
And they had basically adecade head start on anybody really
being meaningful in thiscategory. Even if everyone was trying
to make Athleisure and allthat kind of stuff. And now there's
other players, there'soptions. Right?
So that's just kind of viori.I mean, yeah, they're coming for
(47:46):
their lunch. Totally.
It's time for a parting shot.
Hey, guys, it's time for theparting shot. Who is brought to you
today by Garage Grown Gear. Y'all know. Yeah, Lloyd Vogel. Just
parting shots all day long.
He will. He will. Just not.Yeah, I mean, come on. Lloyd, just
(48:06):
the most angry man. Give it.Give it a day. To where I don't have
to hear about Lloyd Vogel.
You can't keep thatoverexposure going if you don't have
parting shots.
He's like, you know what? Iwant to be at the end of the podcast
now to make sure the peoplewho stick around really get some
more Lloyd in their lives.That's what he was saying.
Okay, so are these Lloyd'swords, or Lloyd is just sponsoring
(48:27):
this? And these are stillColin's words.
Garage. These are Collinswords that Garage Grown is sponsoring.
I wonder.
The answer to that was yes.
Is Lloyd and Garage ground?Are they interchangeable at this
point? Are they the same? Canyou separate the Garage Grown from
the Lloyd.
The cults of personalitygrown, Lloyd?
Maybe that's what it is. MaybeGarage Grown Lloyd is the way to
go.
(48:47):
Ggl.
It's a clone shop. He's justgrowing other Lloyds in his garage.
Yes.
You know that. That is. Maybethat's why the skin is so smooth.
Oh, my God.
Well, that's Trader Lloyd.He's trading other Lloyd.
Yes, that's right.
So that.
That Lloyd that we saw at GoaDiscovery last year wasn't actually
(49:11):
original Lloyd. That was clonenumber three. Probably.
That was Reno Lloyd.
Reno Lloyd. Okay.
Yeah, he does them. He hasthem all. Whenever there's an outdoor
event, he has one stationed.
Gotcha. Okay.
By the way, I think the intronow for the parting shot's longer
than my actual party shottoday. It's pretty short.
Yeah, that's okay.
You know, I just want.
This is a quick one. It's forpeople who are bummed about maybe
(49:32):
the changing retail landscapein the outdoor industry. I thought
of this when I saw a headlinethis week. I thought I would share
it because last week hockeyretail powerhouse Pure Hockey Hockey
announced they are acquiringBar Down Hockey in Overland Park,
Kansas. Now, for thoselistening who maybe don't know the
hockey world, pretty similarto the outdoor world, where it's
many people grow updiscovering the sport through their
local rink, but also theirlocal hockey shop. And there are,
(49:53):
you know, these are mom andpop stores with small locations who
carry all the stuff you needand who partner with the community
to build programs to supportlocal participants. So kind of sounds
familiar if you're familiarwith the outdoor retail world, the
gear shop world, anyway. Andwhile there are still independent
shops that exist, especiallyin specific markets, probably like
in Lloyd's, Minnesota, forexample, Pure Hockey, though, has
(50:15):
been gobbling up some of theselocal dealers and changing the landscape
of hockey retail. So I'm notsaying that's good or bad. I suppose
I'm just saying that theretail landscape is evolving in general,
and it's not just the outdoorindustry where these changes are
happening. And just lastly, Iwant to say I never set foot inside
a bar down, but I have spentplenty of time inside of. Inside
of several pure hockeys. Andfor that, I feel comfortable saying
(50:36):
to the hockey players ofOverland Park, Kansas, I am sorry
for your loss, because it'snot. I'm sure it's not quite as good
experience as your local bardown was. So that's my parting shot.
I guess it was Shot fires atpure hockey.
Yeah.
Really?
Do you think it's. Are thereother categories that come to mind
where maybe there is that kindof shift happening, you know, that
kind of similar to the mom andpop stores?
(50:59):
Well, it's all mom and pop.You know, like you just described
a hockey shop as an outdoorshop. Was the soccer shop growing
up? Was the tennis shopgrowing up?
They all had the run specialty shop.
Yeah, they all. And they allhad people's names to them. Cybil.
I had Cybil's racket shop orTercy's soccer supply. Like it was
kind of always that combo. Andyeah, they're now taken over by the
(51:20):
regionals. You know, in myworld, my Sibyl's racket shop got
taken over. Now it's playersand there are multiple players locations,
you know, things. Things like that.
Team sports. So it's just thena major roll up on team sports. I
forget what the. The companyis that's buying all of them up.
But yeah, all the team.
Yeah, same. Same thing. Yeah,yeah, yeah.
(51:40):
It makes me think of, youknow, the, the. You mentioned Runo
and like the. There'sdefinitely opinions about people
who've had local run shops andthen if it gets taken over specifically
by like Fleet Feet.
Right.
There's a. There's a lot. I'msure we're gonna hear a lot about
that at the running event thisyear, by the way. We're going to
the running event. Everyonelistening. So more of that to come.
So yeah, we'll be there.
But this will get cut. So theywon't hear this.
Probably will get.
But I mean, you know, thereare pluses and minuses here. One
(52:04):
of the things that these, youknow, roll up companies do is they
are offering an exit for, youknow, for these independent specialty
retailers that have been inthe industry for 30 years. Their
kids don't want to take overthe store and it's a way for them
to have a retirement. So, youknow, there's, there's pluses and
minuses here for sure.
For sure.
(52:24):
So. All right, guys, that'sthe show for today. We want your
email. Send them tomyrockflightmail. Welcome. The Rock
Fight's a production of RockFight LLC and today's episode produced
by producer Dave with artdirection provided by Sarah Gensert.
For Owen Comerford. I'm ColinTrue. Thank you for listening and
here to take us out like healways does, as Krista makes with
the Rock Fight Fight song.We'll see you next time. Rock Fighters.
(52:48):
Rock Fight. Rock Fight. RockFight. Rock Fight. Rock Fight. Rock
Fight. Welcome to the RockFight where we speak our truth, slay
sacred cows and sometimesagree to disagree. We talk about
human powered outdooractivities and pig bites. About topics
(53:11):
that we find interesting. Likepop culture music the latest movie
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(53:31):
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