Solstice Outdoor shifts strategic focus to survive

Like the change of seasons for which the company is named, Solstice Outdoor seems to be looking again to begin anew. While the company is still very much in business, we were told, the business model is undergoing a radical shift in direction.

SNEWS® was aware things were challenging for Solstice earlier this year following the departure of several designers and reports of layoffs, but it wasn’t until we received a number of recent calls and emails hinting that the brand was likely going away that we started looking more closely.

Granted, Solstice Outdoor is a mere shadow of what it once was. From a sales zenith of around $6 million in late 1999 and into early 2000, the company began to decline, and former owner Richard Humphrey watched the business nearly collapse. In 2006, Alan Lee, a Taiwanese businessman, swept in and snapped up the Solstice business, while Humphrey maintained ownership of his Portland, Ore. specialty outdoor store Oregon Mountain Community. Lee, a factory owner and experienced in the apparel business, said he had a vision for Solstice, we were told.

By 2008, the company had 15 employees, including a cadre of designers, and it was operating out of a 20,000-square-foot office and warehouse space — more than double Solstice’s previous building accommodations, we were told.

But, we have learned, a combination of the collapsing economic climate along with some business challenges that cropped up for Lee in Taiwan created a perfect storm of events. Those seemed to have helped yank the carpet out from under Lee’s vision of turning Solstice into a brand that he hoped might compete with the likes of Columbia, at least at specialty.

By March 1, the company was operating with six employees. We learned from insiders familiar with the company that Jim Lukich, brought in by Lee in late 2007, was gone by August 2008 over a difference of opinion about company direction. An interim leader lasted, we were told, three months, before now-Executive Vice President Michael Murphy took the helm in December 2008. No one at Solstice, however, would confirm anything on the record about the two former executives.

Despite some rumors to the contrary, Murphy told SNEWS, “We are not closing the doors and we are not shutting down. There is no question retail is not easy right now and the open question remains, who is going to survive the downturn.”

Solstice hinted at a change in strategy with a January 2009 press release that stated, in part, “Our design and development team in the USA working in tandem with our Asia manufacturers will fill an unmet need between store private label and established brands. The resulting opportunity for retailers is increased profits on full-featured technical garments using the 25-year-old Solstice brand.”

Shortly after the 2009 SIA show, the company apparently laid off several more designers and then, at the end of March, it laid off a few more employees and closed its warehouse. Its planned hybrid strategy, hinted at in the January 2009 press release, was becoming more of a direct-to-retail strategy with special make-up and an opportunity to put the Solstice brand on the SMU product.

Though he did not directly confirm that change in strategy, Murphy did little to refute it when he told us, “Our biggest quandary is when we get our product in front of the end-users, it is universally adored and seen as having high value, but there are a lot of gate-keepers between us and the end-user, and that has become a very big problem.”

This means, according to insiders, Solstice is becoming a company that, with the support of Lee’s Asian factories, is looking for various ways to sell direct, develop more private label opportunities, establish key retail partnerships, and run its business without carrying any inventory.

–Michael Hodgson

SNEWS® View: Solstice Inc. has for some time now been relatively successful building private label product for a number of folk in the outdoor industry. It should also be acknowledged that Lee’s manufacturing expertise in Taiwan is in a direct model. Murphy, too, we have learned has a very strong background in textiles, manufacturing and direct selling models, so the leadership is in place to implement a strategy shift.

However, this direct-sell model (from factory, direct to retailer warehouses) works only if you have a retailer set up to actually handle that type of business — receive the inventory, warehouse it, and get it out to stores efficiently. Forget about most small specialty retailers in that scenario as the smaller volumes of orders are typically not sufficient to justify the direct to retail deal. We’re talking retailers the likes of Dick’s, TSA, Target, and Cabela’s and would expect that Solstice is already engaged in conversations with one or all of them.

It is a shame, in some ways, that Solstice could not see it through another year with an eye on specialty. Its 2010 product, we were told, looked pretty sweet and, from the photos we requested and posted above in the story, we’d have to agree — at least in as much as a photo defines sweet product. Still, it looks a darn sight better than a lot of other me-too product we too often see at retail these days. For those who are interested in contacting Solstice Outdoor about SMU or other product, send Murphy an email at michael@solsticeoutdoor.com.

–SNEWS® editors