Zeena Freeman, the new president appointed to replace Peter Metcalf as president of Black Diamond as of last week, is expected to implement a new omni-channel distribution strategy at Black Diamond, which may also involve the establishment of mono-brand stores. She will eventually also become chief executive of the company by June 30, 2015 at the latest, as Metcalf will concentrate more on other brand-building activities, advocacy and other community issues.
The company had already announced last autumn that it was looking for a new senior leader to augment its capabilities in brand management in the areas of apparel, retail and e-commerce. These are the new growth areas set for the company after its acquisition of Poc Sweden and Pieps, the introduction of Black Diamond apparel and the $84.1 million sales last July 23 of Gregory Mountain Products to Samsonite.
Before setting up her own consultancy, Freeman spent many years at Sony Corporation, where she acted as general manager of retail, responsible for the company's retail stores and e-commerce. She also acted as senior vice president of consumer business development at Sony's U.S. subsidiary and was a member of Sony's global sales & marketing team in Tokyo.
Prior to Sony, Freeman worked at the Gap in senior merchandising and management positions, and she served as CEO of People, an Indian fashion and lifestyle brand where she created a network of apparel stores in key Indian cities. She became fascinated with the outdoors when she spent the better part of a year living, studying and trekking in the Himalayas.
Soon after the news of Freeman's appointment, Black Diamond reported an increase of 18.2 percent in its turnover to $34.4 million in the second quarter ended June 30, boosted in part of the launch of new bike-related products by Poc. The figures didn't include Gregory, whose sales rose by 10 percent to $42.9 million, and about one percentage point came from currencies. Sales grew by 14.3 percent to $14.4 million in the U.S. and by 19.8 percent in the rest of the world, with sales to foreign distributors rising by 28 percent.
The gross margin dropped slightly to $35.8 million and operating losses increased by 8.9 percent to $6,050,000 with the inclusion of charges related to Gregory. Net losses more than doubled in the quarter to $4,983,000 from $2,268,000, but adjusted for the elimination of extraordinary items, net losses from continuing operations of around $3.7 million compared with $3.5 million in the year-ago period.
Black Diamond plans to generate savings of $10 million a year by the end of 2017 through a series of measures including a 25 percent cut in the number of SKUs in hardgoods and a rationalization of the general organization. More than half of the equipment currently made at its facility in China will be shifted to its factory in Salt Lake City and other facilities in the U.S. to reduce overheads and response time to its key customers' demand.
The company's board of directors has approved a program to repurchase up to 10 percent of its shares. The management predicts that its sales will go up by between 15 and 20 percent in the second half of this year. Based on orders in hand, sales should go up by between 10 and 13 percent in the next spring/summer season (more in The Outdoor Industry Compass).