MEET THE Internationals

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GEARTRENDS® LIFTS UP THE HOOD AND GIVES U.S. RETAILERS A LOOK AT THE ENGINE DRIVING U.S. EXPANSION DREAMS FOR A SELECT NUMBER OF INTERNATIONAL COMPANIES.

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United States is viewed as the mother lode of markets for many international out-

door companies, simply based on the size of the U.S. economy, the strength of the outdoor market, and the sheer number of people. Visions of sales sugarplums dance in the heads of company CEOs who hope they will get noticed by U.S. retailers, but that’s a daunting challenge amid hundreds of other companies, many locally grown and far better known. Part of the problem is that few if any retailers really know anything about an international company from across the pond, outside the borders or down under before it attempts to come in and make a name for itself. What, exactly, is an Artiach after all? Or a Macpac? Or Hilleberg or Westcomb or Inov-8? Or even Treksta? Some names you might recognize, others, perhaps not. With the above in mind, GearTrends® decided to pay personal visits to select company headquarters as well as conduct in-person and follow-up interviews with others we noticed at international trade shows in Germany. Our goal is to give our U.S. readers a look under the hood to understand what really drives the company, and perhaps give a bit more meaning to the name and, as a result, the products. There is no way we could provide a detailed look at the company’s culture, people, products and innovative drive in just this short section each was allotted, so consider this a teaser if you will. SNEWS® subscribers—and you are one, right?—will be able to read over the next few months revealing indepth and insider interviews in SNEWS® on each company featured in GearTrends®. Simply go to www.snewsnet.com/companyshowcase.

Macpac | Country: New Zealand | Founded: 1973 Products: Sleeping bags, backpacks, tents, technical outerwear and apparel U.S. retailers currently: Approximately 15 | www.macpac.co.nz When GearTrends® visited Macpac at its New Zealand headquarters in March 2005, we were impressed with how open the management was while listening to and communicating with its staff about all aspects of the company. Likely, that culture of open and honest communication has a lot to do with the company’s current success, even after shutting down its New Zealand-based factory and moving production overseas just over 18 months ago. Company President Bruce McIntyre told us that early on in the company’s history, the company leadership and employees defined the purpose of the company as being one of “inspiring people to explore the natural world.” Shortly after 9/11, the company met for a planning session and realized the global impact that fateful day would have on company sales. While recognizing that the company’s vision remained one of being a globally distributed niche brand known for design excellence and superior performance, what McIntyre and team arrived at that day was eye-opening for the company. “We recognized that the thing that continues to drive each one of us, deep down, is a commitment to equipping people to explore their personal boundaries of freedom,” McIntyre told us. He also shared the fact that alongside the standard performance aspirations common to any company— sales growth and profitability—there exists an equal, if not more important company mandate. 42

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“It is essential to our company culture that we maintain an open, positive culture which thrives on success and respects people’s personal needs,” said McIntyre. While Macpac is quite well-known in Europe (the United Kingdom and the mainland accounts for 40 percent of the company’s sales), and enjoys nearly legendary status in New Zealand and Australia (which account for the other 60 percent), the company remains virtually unknown in the United States. But expect that to change. The company’s ultimate goal is to have 50 solid retail accounts before it will consider a U.S. venture successful. And it is well aware that takes time, especially since Macpac won’t open a store unless the company feels there is good chemistry, and that takes more than just a handshake meeting and a phone call. It is that personal attention, even to the interview process for a prospective dealer, that permeates the way Macpac works with all its accounts from day one.

sta will deliver a better product on Aug.1. Little doubt that owning your own factories helps here. It also allows Treksta to quickly deliver reorders even in very small quantities because it doesn’t have to call in countless favors in the process. Beyond product, King told GearTrends® that he works personally with the company designers to ensure product is right for the U.S. market, and is constantly being improved. He also said that he will respond personally to every account, big or small, as he said he believes communication in both directions is critical to success—for both Treksta and the retailers selling its products.

TrekSta

To understand Westcomb, a small British Columbia, Canada-based, startup that debuted products to retailers and media in a small hotel room in early 2005, you have to understand how it defines itself as a company using two words as one description: true form. Alan Yiu, Westcomb’s director, told us that “true form” means, “Product that is uncomplicated, minimalistic and free from redundancies. No borders, no boundaries, no limitations. A passionate and relentless pursuit of perfection. All to provide product designs that are true to form and will enable our customers to stay comfortable and perform in whatever outdoor endeavor they desire to engage in.” The company is youthful, fun-loving and energetic, while at the same time remaining pragmatic. “We accept the fact that not everybody will like what we offer, and there is nothing wrong with that,” Yiu told us. He does ask though that before any retail buyer passes a snap judgment, they first try on the product. “Our fit should hopefully speak for itself,” Yiu added. Indeed, the sample pants Westcomb sent our editors to test have now traveled around the globe and around the country, with several editors refusing to take them off (well, OK, they have admitted to removing the clothing for bathing and sleeping). The reason is excellent fit and performance—true to form. Currently, the company’s products are selling well into Japan (25 percent of sales), Korea (35 percent of sales) and Canada (40 percent of sales).

Country: South Korea Founded: 1988 Products: Footwear U.S. retailers currently: Approximately 30 www.trekstausa.com Treksta might very well be the biggest outdoor company you’ve never heard of. Not too many outdoor footwear brands can boast owning its own factories and employing more than 5,000 people. But Treksta can. The South Korean company built its first factory in 1994 and began manufacturing footwear for other companies. Today, the company’s factories produce technical outdoor footwear for itself, as well as a number of its competitors. The United States represents that last major market in the globe for Treksta, a USD $250 million company which already distributes its shoes in Europe, South Africa, New Zealand, Russia, Japan, South Korea (of course), Canada and China. Treksta USA was established in Portland, Ore., as a U.S. division of the company, and first offered product to U.S. retailers at Winter Market 2005. U.S. President Simon King readily acknowledges that his division is the smallest actual part of Treksta, but the one with the largest potential market. King believes that his division could very well represent 50 percent of the company’s global sales by 2010. To get there, King is banking on retailers to care about the company’s mantra of doing it better and producing it faster than any other footwear company. He asserted that if another footwear company will deliver new products on Aug. 15, Trek-

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Westcomb Country: Canada Founded: 2003 Products: Technical outerwear and clothing U.S. retailers currently: Only 1 (as of June) www.westcomb.com

Inov-8 Country: United Kingdom Founded: 2003 Products: Trail running footwear U.S. retailers currently: Approximately 29 www.inov-8.com Already garnering praise with product-ofthe-year and editors’ choice awards from top magazines serving trail-running consumers around the world, Inov-8 is banking on grassroots efforts and word of mouth to convince U.S. retailers that the company’s shoes deserve more than just a casual glance. What makes the company and, as a result, the Inov-8 shoes different from others is in the design philosophy. Rather than build trail running shoes that are a hop, a skip or a jump in the dust away from being roadrunning footwear, Inov-8 began with a design idea that was its answer to a question, “What is the best thing for running on off-road terrain?” The answer, according to Inov-8, is bare feet. So, the company’s designers set about creating footwear that was controlled by the foot. The company’s logo, too, embodies the essence of a bare foot. The overall design concept is that the shoe takes advantage of the physiology of the foot. The lacing system is designed to secure the footwear to the foot, without altering the natural alignment of the metatarsals. Mesh is designed to allow maximum ventilation and work with the foot to pump water out of the shoe if a stream crossing presents a damp opportunity. Realizing that a company must establish more than a tentative toehold to be successful, Inov-8 established its own U.S. branch—a wholly owned subsidiary. In addition to the United States, the shoes are selling well in the United Kingdom, Holland, France and Japan. Australia and New Zealand markets are being opened in 2005. Though it naturally wants to see the business expand in this country, the company maintains it is not at all interested in boosting sales by offering discounts or reaching for volume distribution—music to a specialty store’s ears. “Our goal is to provide innovative design approaches to the off-road market through our unique products,” said Lesley Keenan, Inov-8’s U.S.-based marketing director. The company will only manufacture off-road shoes, and told us that it will promote the brand initially through grassroots efforts, such as sponsorship participation in local and nationally recognized trail runs, trade shows, retailer visits and select marketing in key national running publications. When asked how the company would quantify success in its first year, Keenan

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stated, “Success in this market will be quantified based on the numbers of runners that we can reach, rather than the number of retail stores that carry our brand.”

Flatworld / Orikaso Country: United Kingdom Founded: 2003 Products: Collapsible bowls, cups and plates U.S. retailers currently: Approximately 150 www.flatworld.co.uk SNEWS® readers will know the name Orikaso as we highlighted this company as one of the coolest new products that could find good acceptance in the United States after we saw it at the OutDoor trade show in Friedrichshafen, Germany, in July 2004. The company name is the creation of Jay Cousins who coined the term Orikaso—Ori means fold in Japanese and Kaso means plastic—to describe a product that grew out of a student project. For his major in industrial design engineering at a British university, Cousins came up with what is best described as camping origami—flat sheets of plastic that can be folded and shaped into three-dimensional cups and bowls and, when snapped and unsnapped in certain ways, can also be cutting boards, coffee filters, scoops and the like. Made of food-grade polypropylene, Orikaso products travel and store flat and, as our team can attest, are easily folded into their unique shapes for outdoor activities. Orikaso has been available in the U.K., Europe and Japan for a few years, and was a winner in the ispo BrandNew awards for new companies in 2004. Axis Outdoor launched Orikaso into the United States at the SIA and Winter Market trade shows in 2005 and began shipping to nearly 150 dealers in March. Mike Curtis of Axis Outdoor told GearTrends® that dealers who display an assembled example of the product are the most successful with it currently. “Even though the packaging does a great job of presenting the product, there is nothing that draws the attention like a piece out of the package for customers to examine,” Curtis said. “The product is a real attention-grabber.” And people are definitely noticing, with the Denver Post recently stating that, “Orikaso could soon find a seat next to the Swiss Army Knife in the backpacking world of top inventions.” And what is the company’s raison d’etre? “To whatever lifestyle you subscribe, whatever philosophy you live by, go where you go, do as you do, and don’t take too much baggage with you,” Cousins told us.

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Camping Logic Country: Canada Founded: 2004 Products: Organizing systems for tents U.S. retailers currently: Approximately 200 No website currently Camping Logic is a division of a much larger company, Malenger Inc., that was founded 13 years ago and remains a global market leader in providing sports storage products. With a background in sorting out hard-to-organize items like bats, balls, hockey sticks, and all the associated paraphernalia, it is no surprise that when the company began looking at the camping market, it saw a great opportunity—organize those cluttered family camping tents. While there are only two products offered currently, expect more within the next year due to the reception the first two have received, according to Mark Mallen, manager of Camping Logic. And expect each to reflect features that grow out of a company whose design team has been “camping since fire was invented,” quipped Mallen. The Camping Closet features an angled back so that it tucks easily into the side of a tent wall—typically angled as well. Shelves and pockets hold clothing, water bottles, cameras, personal items, keys, wallets, and more—all the stuff you don’t want to spend your time rummaging around inside a duffel to find. The Adjustable Gear Loft With Light—OK, so the company doesn’t get any points for naming creativity—is marketed to meet the needs of folks who want to retrofit their tents that came “before the time of tents with built-in gear lofts,“ said Mallen. The convenience light provides illumination for midnight searches for socks, shoes or zippers—that would be the tent zipper you sick people.

Crumpler Bags Country: Australia Founded: 1995 Products: Messenger bags, bags for photographers, bike bags U.S. retailers currently: Approximately 30 (bike/outdoor), 30 (computer), 100 (photo) www.crumplerbags.com We’ll forgive the company’s predilection for Vegemite (with one GearTrends® editor maintaining that the British version, Marmite, is far superior). And while we chuckled at the “bags for beer” commercial the company emailed us, we suspect its meaning might be lost on Americans—as much as we also love beer. Aussies, after all, do have a whacky sense of humor. And it is that sense of humor that will likely be delightfully evident to anyone dealing with Crumpler, from the CEO right

down to the sales reps. The company’s answer to our query, how many retailers are you hoping to have open by the end of 2005? “Just the good ones.” To know the company, and appreciate the silliness, you have to understand its humble beginnings. Dave Roper and Will Miller ran a bike messenger company in Melbourne, Australia, called Minuteman Messengers. The two were having trouble sourcing a local supplier of small runs for custom-made messenger bags. Stuart Crumpler was working as a messenger part time, while also making furniture. He showed the two a few bags he had made for some of his courier mates based on a basic single shoulder strap sack he put together to get pizza safely home on his bike. Minuteman ordered 20 of his bags, and soon had people calling and asking where they could get those brightly colored sling bags. The three then got together in November 1995, bought some second-hand sewing machines, set up a small workshop, and started making and improving the designs while still working as messengers. The company was named Crumpler, we were told, simply because they thought it sounded better than either Miller or Roper. The first product was the CD-01 (short for Crumpler Design Number 1), a basic, lightweight canvas messenger bag which the company started wholesaling through local bike and outdoor stores. Of course, wholesaling is a rather loose term as much of the transactions revolved around trading for bike parts and beer. Still, the three could taste success—quite literally. In 1997, before deciding to get out of the messenger business, the three thought it would be wise to see what buyers on the other side of the world thought of the products—so they exhibited in Germany’s OutDoor show, popping the champagne after securing an order for 100 pieces from a Japanese retailer—this time for actual cash. In early 1998, the three sold the messenger business and started working full time designing and manufacturing bags, which by then included padded inserts for the messenger bags to protect cameras and laptops.

Casa Artiach Country: Spain Founded: 1928 Products: Backpacks, sleeping bags, self-inflating pads, outdoor clothing and footwear U.S. retailers currently: 0 www.artiach.com Summer Market 2005 marks the company’s first foray into the United States. Currently, the company’s products (packs, tents, bags and pads under the Artiach

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Photo Gabe Rogel

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brand, technical clothing under the Trangoworld brand) are sold in Canada and Germany via subsidiaries, in Norway and Sweden via exclusive distributors, and in France via distribution agents. Founded in 1928 by two mountaineers, Hidalgo and Artiach, the company is recognized as the first company manufacturing products for sports in Spain. In addition to the United States, the company is looking to expand into Asia and South America. Its company motto is, “Maximum safety and comfort at the minimum weight.”

66 Degrees North Country: Iceland Founded: 1926 Products: Technical outerwear and apparel U.S. retailers currently: Approximately 50 www.66northus.com When Sharon Prince traveled to Iceland a few years ago, she fell in love—that is, she fell in love with a culture and a brand of outerwear “unlike anything I had ever seen in the States.” But, unlike most people smitten with love, Prince moved forward carefully, understanding that in order for the company to be successful in the United States, she’d have to communicate what

she saw and felt while in Iceland through marketing, images, careful selection of retail partners, and out-of-the-box thinking that garners attention and ensures a sense of identity that customers can understand. A visit by the president of Iceland to her trade show booth at Outdoor Retailer in 2004 signifies just how proud the country is of its heritage, the 66 Degrees North brand and the job Prince is doing in staying true to the company’s Icelandic roots while she promotes the brand in the U.S. market. “When you buy 66 Degrees North, you buy a piece of Iceland and all that it conjures up—exotic, stunning, edgy and extreme,” Prince told us. “All of our products can be found in Iceland on both glacier treks, as well as at the Reykjavik night club scene.” Prince is far more concerned with limiting 66 Degrees North to stores that can effectively communicate the beauty and sophistication of the brand than she is in opening doors and pushing for sales—and that bodes well for the better specialty stores any way you look at it. “Any time a retailer brings a new brand into their store, they are taking a risk,” Prince told us. “It is a double-sided gamble, and we recognize this. We want to partner with our retail partners to make sure

66 Degrees North is a draw. But that also means limiting our retail presence to stores that can effectively communicate the beauty and sophistication of our brand.”

Hilleberg the Tentmaker Country: Sweden Founded: 1971 Products: Tents U.S. retailers currently: Approximately 15 www.hilleberg.com Hilleberg carries the name of the company’s founder, Bo Hilleberg, a forester and outdoorsman who created the company because, as his daughter and U.S. operations manager Petra Hilleberg told us, “He was dissatisfied with the tents then available, so he set out to make his own.” Unlike many companies today, the entire company operates under an ideal that as manufacturers, each owner and employee must also be an active user of the tents the company manufactures. Only in that way, the company said it believes, can each one of the staff be knowledgeable sources of information about outdoor equipment and usage. “More importantly,” Petra told us, “that ethic (of using what we make) stresses

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Climb your sales peak Full overview of the market with an unchallenged dimensional depth for specialist outdoor and sports equipment dealers 574 exhibitors from 33 countries, 69.5 % international 14,117 trade visitors, 54.2 % international Situated in Europe’s most scenic landscape Best business, perfect atmosphere – the show with the outdoor spirit

The European Trade Show

Friedrichshafen Germany July 21– 24, 2005

For more information please contact: Mrs. Luann Alesio Phone: 949-489 9982 Fax: 949-489 9299 e-mail: [email protected]

www.european-outdoor.com

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Trade visitors only

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honesty and reliability, both in terms of what we make and also in terms of how we deal with our customers.” The company, which continues to be a family-run operation, owns its own factory and prides itself on the fact that it specializes in making tents better than any other company in the world, because it focuses on one thing only—making tents. Hilleberg’s U.S. subsidiary is based in Seattle. Rolf Hilleberg, Petra’s brother, runs the European arm of the business. Bo remains chairman of the company, and the company’s co-founder, and Bo’s wife, Renate, manufactures all the tent prototypes and oversees product development. Petra told us another reason each tent the company creates is so good is that each tent is made completely by hand. “One specialist assembles the fabric pieces, sews them, checks them for quality, and then quite literally puts his or her name on the tent by sewing a nametag inside,” Petra said. “Then another factory specialist sets up each tent and checks it over completely before taking it down and packaging it for sale.” Currently, Hilleberg tents enjoy a very strong reputation for quality and workmanship in Germany, Great Britain and

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the Scandinavian countries, and a growing popularity in the United States.

Icebreaker Country: New Zealand Founded: 1995 Products: Merino wool clothing U.S. retailers currently: Approximately 150 www.icebreaker.com When Icebreaker, which asserts it was the first to take the concept of merino outdoor technical clothing to a global market in 1995, made its initial foray onto U.S. shores in 2002, it was with the assistance of Don Love, then CEO of Gramicci. At the time, merino was a relatively unknown category in this country, with many U.S. retailers finding it hard to separate the word “wool”—implying scratchy, stinky, and certainly not something you’d want next to the skin—from the word “merino,” which Jeremy Moon, Icebreaker’s CEO, touted as the ideal base layer. What a difference a few years makes. Now, Icebreaker is going it alone here in the United States, having established its own wholly-owned subsidiary headed up by Troy Ballard, with plans to have upward of 200 carefully selected U.S. retailers carrying merino base layers, shirts and

sweaters by the end of 2005. Icebreaker began with an idea that merino offered the key benefits of the best synthetic products (easy care and lightweight) and the natural benefits of wool (warm, breathable, odor-resistant and biodegradable), but without the itch or weight. Believing in the idea, Moon told us he quit his marketing executive job at age 25, mortgaged his house (helps to have a loving, supportive wife), raised some capital, created a business plan, and lost USD $176,000 against USD $111,000 in sales the first year. Moon refused to quit and, by 1998, sales took off. Icebreaker is currently sold in 20 countries and doing well in all but Japan, where Moon candidly told us sales were hurt by “sizing issues.” Moon said he sees nothing but blue skies ahead for both his company and retailers. “The challenge was to take this fiber designed by nature to keep an animal alive in the mountains, and through smart use of design and branding, transform it into a clothing system for the human body,” Moon told us. “We’ve done that, and I think now merino clothing is one of the ‘next big things’ for the outdoor industry in the U.S.” » To access our trade-only resource center or to give us feedback, go to GearTrends.com.

Cover the Elements. Wind. Water. Sun. Earth. We let you brave them.

Burlington® WorldWide Activewear is the premier supplier of technical fabrics to leading activewear brands and retailers worldwide. We design and engineer performance fabrics for technical sportswear, performance outerwear, active sportswear, swimwear and fitnesswear. Come visit us at the following trade shows: - Outdoor Retailer Booth MR 252A - Friedrichshafen Outdoor Hall A4 Booth 108 - Munich Fabric Start Booth S1 D1111 - Paris Texworld Hall C Booth C 46 USA contact: Nelson Bebo 212.621.4046 Europe contact: Helmut Autenrieth 49.731.51337

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