Obōz founder says Kathmandu deal is 'perfect ending to a great beginning'

Obōz Footwear Founder John Connelly said his brand began as a happy accident and the acquisition by Kathmandu makes for a happy ending.

“I was actually at a birthday dinner in Salt Lake City at the winter Outdoor Retailer show in 2007 and I mentioned to some REI folks that sometimes I thought about starting my own brand,” Connelly said. “They said, well if you do we’ll be your first customer. The next day, I ran into folks at Kathmandu from New Zealand. They said, we’ll be your second customer.”

“In less than 24 hours, I had two willing buyers from two of the best possible large retailers I’d be lucky enough to have,” Connelly said. “And I went, ‘Now geez, I’ve got to make this happen.'” 

Kathmandu Holdings, the outdoor clothing and equipment chain primarily in New Zealand and Australia, for $60 million in cash and an earn-out of up to $15 million has agreed to buy the Montana hiking boot wholesaler as it looks to expand globally in Europe and Asia.

Founded in 2007 by Connelly, Obōz designs and distributes shoes meant for backpacking, hiking, adventure travel, and general outdoor wear to outdoor retailers in North America.

The two companies have had a strong relationship for more than a decade. Connelly, who has been in the outdoor industry since the early 1970s, said he worked in retail and then went on to become a sales rep, creating relationships with REI and Kathmandu.

Connelly said he convinced his three best friends from the ninth grade to invest, and together they started the company and launched in August 2007 at Outdoor Retailer.

Kathmandu, though the second customer of Obōz, was actually the first retailer to receive a shipment of product, and is currently the only retailer in Australia and New Zealand selling the brand in 164 stores.

Connelly, 71, said the name Obōz came about because he wanted to stay true to the trail, Bozeman, Montana, and the Yellowstone area. The four letter brand stands for outside of Bozeman. Many shoes are named after mountains in the region. 

He said rather than building a big brand awareness, it was the strong support from staff on the retail floors advocating for the products that made the company successful. He said while they’re primarily focused on hiking shoes, the brand introduced insulated products and are planning to announce other category introductions.

The top retailers are Kathmandu, REI, Mountain Equipment Co-op, L.L. Bean, and Scheels. Connelly said Obōz does not sell directly to consumers or to Amazon, in an effort to protect the brand. The acquisition is a “perfect ending to a great beginning,” he said.

“As I look back over the 11 years, it’s pretty interesting to think of it that way,” Connelly said. “We’ve had other people interested in investing and buying the company. It was really about finding the right partner to leave the brand with so our employees and our customers would be comfortable, and it would remain authentic.”

Connelly will continue to lead Obōz from Bozeman, Montana, and will report to Xavier Simonet, Kathmandu’s CEO. 

Simonet said in a statement that it’s only natural that, after so many years of close collaboration, they deepen their relationship.

“I admire the success of Obōz in North America,” Simonet said. “They are an authentic outdoor brand with deep roots in Montana and driven by a passionate and successful team. We all look forward to working with them”.

Connelly said in the statement that the two brands share many common values, including passion for the outdoors, focus on product design and innovation, customer-first culture, collaborative team work, and strong emphasis on sustainability.

“The bringing together of two leading outdoor brands with shared values makes good sense because it will enable both brands more opportunities to fulfill their potential,” Connelly said. “I am extremely excited to bring the scale and synergies of the two brands together that we feel will result in a profitable relationship for both of us. We will drive faster growth, more innovation, gain more expertise and inspiration from each other. This is the right partnership for us at the right time.”

The expected benefits of the acquisition include a more balanced geographical exposure of diverse products, a stronger foothold in the outdoor footwear category for Kathmandu, leveraging each brand’s expertise, and further Obōz expansion in Australia and New Zealand, as well as access to international markets.