Kulczycki takes over at Filson, plans to stay course of retail and brand expansion

Bill Kulczycki, the former vice president of business development at Patagonia, was named the new president and CEO of C.C. Filson Co. of Seattle on Oct. 4. He takes over for minority owner Doug Williams, who is stepping down after serving as president and CEO since March 2005, when he, in tandem with Brentwood Associates of Los Angeles, purchased Filson from Stan Kohls. Williams will serve as chairman of Filson’s board of directors.

Kulczycki, who told SNEWS® he fully expected to remain retired after stepping away from Patagonia earlier this year, said the opportunity to run Filson was too good to ignore.

“This is an iconic brand in the outdoor industry that is very unusual in that it has been around for 103 years,” Kulczycki told us. “I honestly thought I was retired, but when this came along, I got very excited by the idea.”

While acknowledging that Filson has been trying to sail through some rough waters of its own making in the past year, Kulczycki told us there is nothing but smooth water ahead if he is able to do what he knows needs to be done.

“This brand has so many opportunities for it. The ideas that were put into play following the acquisition — launching a sportswear line, expanding distribution, adding retail and even taking some of the manufacturing processes overseas — were not wrong ideas,” said Kulczycki. “What did go wrong was in the execution of those ideas and the lack of communication with our customers about why we were making the changes we were making.

“My position about a brand is that we don’t own it, the customers and dealers own it, which means you have to communicate very clearly about intentions well before you get to the point of execution,” said Kulczycki.

He cites the introduction of the Lodge Collection in late 2005, which was more sportswear-focused and included clothing Filson traditionalists were certainly not used to seeing under the Filson brand — clothing such as Henley sweaters, corduroy pants and wool-cotton blended shirts more suitable for wearing around town than in the woods.

“The concept of the Lodge line is excellent, but it has garnered only limited traction in department stores,” Kulczycki told us. “We have to decide what the Lodge idea is and what it isn’t, and then clearly communicate that to our team here so they understand why it is being positioned in the way it is. And then, most importantly, we have to communicate that to our customers so they understand what the change is and isn’t, and what it means to the brand.”

Kulczycki told SNEWS® that despite the current challenges, all is very healthy for a company that reported $20 million in sales in 2004 and expects close to $30 million by end of fiscal year 2006.

“The company margins, sales numbers and metrics in all areas are very, very healthy,” said Kulczycki. “Our opportunities short term are for reconnecting with the core Filson value and customers. Long term, there is a lot of potential growth in direct sales via mail order and the Internet. Additionally, there is opportunity in slowly adding more retail stores.”

Filson currently owns and operates two retail locations, one in Seattle and one in Denver. Kulczycki told us that the Denver store, which has been open nearly a year, is performing above expectations.

Balancing the traditional values of an American company which boasts American-made products, with the realities of a global market, Kulczycki knows he will be the one at the helm as more production is steered overseas, away from the Seattle-based factory where as much as 85 percent of the brand’s products (clothing, luggage and footwear) are still made.

“The Seattle factory is a very unique asset, since it has the ability to operate efficiently on very small production runs and the quality of production is extremely high. It is able to do this simply because the factory has been making the same products for a very long time, and we have sewers who have been there for 15 to 20 years,” said Kulczycki. “That factory is the only one that can produce our oil-finished garments and luggage as efficiently as it does, so the factory is not going anywhere.

“However, using the touchstone, ‘might as well have the best,’ I can argue that in today’s market, with global sourcing, producing the best means some products will be better sourced and made overseas,” Kulczycki said. “That is a reality that cannot be ignored.”

SNEWS® View: Brentwood and Filson got this one right. Congratulations to Kulczycki. As vice president of business development at Patagonia International, Kulczycki was responsible for Patagonia Europe, Patagonia Japan, Patagonia International, Beneficial T’s, Lotus Designs and Water Girl USA. Prior to that, he held various management positions at Patagonia, some of which included opening stores (nearly 40 by one count) in the United States, Japan and South America. There is no question he knows branding, knows the business of brand care-taking, and knows what he can and cannot do in order to maintain brand integrity and customer loyalty.

In our view, Kulczycki’s greatest challenge will be one of protecting the integrity of the Filson brand in the eyes of its most loyal customers — the male sportsman who hunts and fishes, earns over $100k annually, and is in the 35- to 55-age group — while expanding the line’s appeal to a broader, though perhaps no less affluent demographic. That was something Williams was unable to do by all accounts, and likely proved to be his undoing.

If Kulczycki can demonstrate that Filson’s true values remain, and that it remains committed to its core customers, all while showing the company is working to become more current in terms of offering product that is relevant to a more diverse demographic, Filson’s investment owners will be smiling indeed. And well they should.