Black Diamond lays off key personnel in apparent restructure
Cuts plus potential sale of Gregory brand indicate changes ahead for the outdoor company as it looks to align resources with growth.
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Black Diamond has laid off employees at its U.S. headquarters in Salt Lake City as part of apparent restructuring at the company, SNEWS has learned.
While the exact number isn’t available, at least a dozen people are suspected to have lost their jobs or are moving on, several sources familiar with the situation tell SNEWS. Black Diamond officials declined comment on the news, stating that as a public company (NYSE:BDE), any information would first have to be disclosed to the markets.
It is unclear whether the layoffs are just at the Black Diamond brand or if they involve the wider scope of Black Diamond Inc., including Gregory Mountain Products, Pieps and Poc Sports.
The departed include some significant names in Black Diamond’s product division leadership including Ski Category Director Thomas Laakso and Packs Category Director Nathan Kuder. Laakso helped develop a less toxic and more efficient ski manufacturing process that Black Diamond used at its new ski manufacturing plant in China and Kuder played a key role in Black Diamond’s new fan-powered avy airbag, which made it’s big splash at Winter Market 2014.
It’s no secret that parent company Black Diamond Inc. is facing potential changes as it deals with an evolving business and budget realities. The company burned through cash to acquire Poc Sports and Pieps in 2012, and launch its apparel line in fall 2013. As of December 31, 2013, Black Diamond Inc. reported cash reserves of $4.5 million with a total debt of $38 million with $19.7 million left available on a revolving line of credit.
In February, Black Diamond Inc. CEO Peter Metcalf revealed to investors that the company is exploring options to sell either all or parts of its Gregory Mountain Products brand to help fund future retail and e-commerce investments.
At that time, Metcalf indicated the company would shift from its recent acquisition strategy to focus on organic growth, particularly at Poc Sports and Black Diamond Apparel, as well as seek a senior executive leadership candidate for its lifestyle brand management and general management, specifically in the areas of apparel, retail and e-commerce.
“Black Diamond Apparel and POC independently represent the company’s most significant long term opportunities for compounded multi-channel multi-year revenue growth and profitability,” Metcalf told investors. “We prefer to invest our capital resources in the growth and development of our fastest growing assets, rather than acquiring additional brands.”
While Black Diamond doesn’t release brand- or category-specific results, at least one analyst on Wall Street told SNEWS he isn’t surprised to hear some of the cutbacks coming from the hardgoods side of the business.
“It would seem natural,” said Andrew Burns, a research analyst with D.A. Davidson & Co. “We believe the core equipment side of the business, excluding apparel, has slowed somewhat, which we see as part of a general slowdown across the outdoor industry.”
In November 2013, D.A. Davidson downgraded Black Diamond stock from buy to neutral based on those concerns, he said. But beyond those immediate hurdles, Burns said, “we still think it’s a well run company with great plans.”
