Cloudveil has been acquired by Sport Brands International (SBI), and becomes Cloudveil Mountain Works Inc., a division of SBI. Financial details of the agreement were not disclosed. SBI is privately held and is backed by U.S. investment fund Cerbrus Group. SBI owns both Fila and Ciesse.
Steve Wynne, president of SBI, told SNEWSÂ® that SBI was attracted as much by the people that make up Cloudveil as they were by the brand quality and potential for growth. As such, the Cloudveil offices will remain in Jackson, Wyo., and Denver, Colo., and the entire in-house team and independent sales force remain intact. Co-founder Brian Cousins has been named president of the new entity, and co-founder Steve Sullivan is the global brand director. Jon Boris and Michael McGregor, who joined the Cloudveil management team in 2002 with what was termed then as a “significant capital infusion,” both remain on board as well.
“As you know, we have been getting approached for five years now, and two years ago we worked out a private equity investment with Jon and Michael and their companyâ€¦that was phase two for us,” Sullivan told us.
Cousins and Sullivan both knew that they would need even more capital to continue growing and competing, and over the last eight months they began entertaining additional offers.
“We were getting approached by quite a few interested parties, and we remained very patient — realizing we would only entertain deals that would keep our brand and team intact and give us an optimal opportunity to succeed,” said Sullivan. “SBI came along as a cold call and the more we found out about them, the more intriguing the idea became to us. They have an amazing management team and Fila is undergoing a great turnaround under their guidance.”
Added Sullivan, “Right now, I am so energized and excited. I feel like I did when Brian and I first exhibited at Outdoor Retailer in 1997 with a 10 by 10 booth and 12 styles.”
Underscoring SBI’s belief in Cloudveil and the existing team, Jim Reilly, the managing director of Cloudveil Mountain Works Inc. and a senior vice president of SBI, stated in a company release that, “We believe an entrepreneurial approach to building a strong sustainable business should be at the heart of everything we do. Cloudveil is a perfect example of this.”
Wynne was equally excited when speaking to SNEWSÂ®. “These guys clearly have the same aspirational goals we have. At SBI when we started, we looked at the various categories Fila was or had been involved in through a lens asking ourselves, ‘Can we be a company that serves the needs of the true performance athlete in these categories?’
“In running, tennis and even in skiing, we answered yes. We came up no in basketball, outdoors and others. And the answer to that question drives the methodology we have used to refocus the Fila brand and help us look for acquisitions in performance categories where Fila is not,” said Wynne.
“We are interested in acquiring brands that focus on meeting the performance and lifestyle needs of peak performers. High-end athletes need and deserve performance product when they are competing, and then they deserve the same high-end luxury product to wear off the slopes — Cloudveil is that kind of brand for the outdoors.”
We asked Sullivan what his plans were now, and how long he would be staying with Cloudveil.
“The deal was a very fair market value and a very good deal for Cloudveil, and I am not going anywhere,” said Sullivan. “I look to be with the company as long as they will have me. This is just another step in the evolution of our company and I love walking into the office every day.”
As for Cloudveil, expect to see immediate growth into Europe, a market the company has coveted but has been unable to tap into due to limited resources and time, according to Sullivan.
Now, with SBI’s and Fila’s connections in Europe, the door just swung wide open. In fact, Sullivan tells us Cloudveil will now be at ispo, sharing a booth with Fila — a very last minute decision enabled by the SBI acquisition.
“We think Cloudveil has a tremendous upside in Europe,” added Wynne.Â Â Â
SNEWSÂ® View: The last two years have been like Mr. Toad’s Wild Ride for Cloudveil, and how the folks there managed to survive is a tribute to their strong management structure. In 2003, the company shared numbers with us of 76 percent growth, gross margin growth of 4 percent, and new storefront growth of 25 percent. In 2004, that growth ticked up to 80 percent, according to insiders. The company considered 2002 a down year — it only had growth of 30 percent. With SBI, Cloudveil is now positioned to become a serious player on the global scene too, and garner mentions in the same breath as established uber outdoor brands The North Face, Marmot, Mountain Hardwear, etc. Add in growth the company will certainly realize in Europe, as well as growth in Korea and China and we suspect growth percentages will remain meteoric for some time to come. We have no doubt that with Sulli and team firmly on board — Sulli still gets to skin up the local slopes before work — we believe that Cloudveil will continue to embody the same design vibe and authenticity of a mountain town-based company. And that only bodes well for it and for its new parent, SBI.