Outdoor Retailer - Summer 2017 - 20

THE PULSE

20 OUTDOOR RETAILER

/ Summer 2017

SEMAPHORE SQUAD
Mountain Khakis
brand manager Jen
Taylor, president
Ross Saldarini, and
retail manager Steve
Carpenter pose in the
new flagship store.

14,000-square-foot Black Creek Outfitters
in the 150-store St. Johns Town Center outdoor mall in central Jacksonville, Florida, is
steps away from more than a dozen branded
stores, but none of them directly compete
with his outdoor, paddlesports specialty.
But he's close to nearby big retail competitors like Dick's Sporting Goods, West
Marine, and REI.
"Walk around our area and you can't
help but walk down brand roads. There's
Microsoft, Apple, Tommy Bahamas,
Lululemon. You can't help but notice the
consistent drumbeat of mark-downs at these

IN MANY WAYS, A BRAND'S EFFORTS TO BUILD ITS
IDENTITY THROUGH ITS OWN STORE IS TAKING A
PAGE FROM THOSE RETAILERS, WHO FOSTER THE
GROWTH OF COUNTLESS BRANDS FROM OBSCURITY
TO INTERNATIONAL PROMINENCE .
borhood and the square footage. You need to
know the direct-to-consumer strategy that's
driving the store's retail practices, like the
percentage of goods sold at MSRP," Hill says.
"If you don't know that, then it's really difficult for anyone to form an opinion on whether it's a good or a not-so-good thing."
Some brands are doing direct-to-consumer right with pricing practices that enable
retailers to thrive, Hill says. "But there are
also companies out there that definitely are
not playing well with others," he says. "If our
stores did the same things they're doing,
those brands wouldn't open us as a dealer."
There's one more point, according to
Hill: Flagship stores are excellent at speaking to the choir. They tickle brand loyalists.
"What they aren't so good at is creating new
converts," he says. "That is what the trusted
third-party opinion of specialty does so well."

FOLLOW THE ROI
The danger for a brand opening a flagship is
that a lack of retail experience can cost more
than they expect and they end up becoming
outlet stores, which ultimately does damage to retail partners, says Joe Butler. His

brand stores," Butler says. "Then it becomes
the expectation. Why would a consumer pay
full price for anything? It's a trap branded
stores can fall into."
Butler has an idea for manufacturers eager to build a castle for their brands: Avoid
the seemingly unavoidable outlet trap and
look at the flagship through the lens of a return on investment.
"If they took every dollar they used to
build and run these branded stores and sunk
it into their top 50 retailers and said, 'you
might not be a brand store but we want to
treat you like a brand store'... it would empower retailers and just knock it out of the
park. They could have one store in one location or 50, 75 zealots for their brand spread
across the country," he says.
Butler has partnerships with five brands,
and his team members are experts on them:
Yakima, Hobie, Outdoor Research, Osprey,
and Astral. Those partnerships elevate the
balance of being valuable to the consumer, the
vendor, and the manufacturer.
"It just required a willingness to understand what a vendor is good at and them recognizing there are things they are not good

Courtesy Mountain Khakis

ers, the company is planning three "popup" stores this year. The brand opened its
first temporary pop-up in Chicago during
the holiday season last year, and it proved
"successful and incredibly insightful," says
Molly Cuffe, Smartwool director of global
brand marketing.
Pop-ups are nimble, short-lived, unique
spaces that are sometimes inside partner
stores and sometimes stand alone or are
part of an event. For Smartwool, the popup is way to show consumers that the brand
has mid-layer products beyond their wildly
popular socks and base layers.
"Same as with partner stores, picking a location is a critical component in the process.
We want to make sure we are in a location
that works for the brand and is accessible to
our consumers, but not next door to a key
wholesale partner," Cuffe says. "Equally important is working closely with our wholesale partners in the area to ensure we are all
driving toward the same promotional strategy in that we are all pushing the same story
at the same time so we have maximum voice
in the marketplace."
Columbia Sportswear's vibrant directto-consumer strategy leans on a mix that is
dominatd by outlet stores, followed by ecommerce, and then branded stores. As of March
31, 2017, the company has 93 U.S. outlet
stores, four U.S. branded stores, two employee stores, and four brand-specific ecommerce
sites. It plans to open 11 new locations in 2017.
"Outlet stores provide us with a profitable
means to clear excess inventories in an orderly fashion without relying on third-party
liquidation channels, thereby helping to protect the brand(s) and keep in-line wholesale
channels more healthy," says Ron Parham,
Columbia senior director of investor relations and corporate communications.
Rich Hill, the president of Grassroots
Outdoor Alliance, a 61-store collective of
outdoor retailers across the country, says the
trend of brands discounting their products
at flagships isn't necessarily a bad thing, it
just doesn't work for specialty retailers.
"If you're trying to figure out whether a
flagship store is 'good or bad' for specialty,
you need to know a lot more than the neigh-

Outdoor Retailer - Summer 2017

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