What the Outdoor Industry Can Learn from Steve Job’s Resignation as Apple Computer CEO
When Steve Jobs finally retired as CEO of Apple Aug. 24 after seven years of battling cancer, speculation about how the company would fare without its mythic founder briefly flourished. How could the technology company possibly replicate the success of such innovations as the Mac, the iPhone, the iPad and iTunes without the vision, passion and drive of its founder, analysts asked?
More telling than all the conjecture, however, was the performance of Apple’s stock. After slipping less than 1 percent in the two days after the news, the stock rose 4 percent. Last Friday it closed at $385 a share, or about 3 percent higher than the day Job’s announced his resignation. The stock’s performance reflected investor confidence that Jobs and Apple’s his board of directors had done a solid job of grooming his successor Tim Cook for the CEO role in the seven years since Job’s cancer diagnosis had been disclosed.
The drama surrounding Jobs resignation may seem a world away from the outdoor industry, but it serves as a timely reminder of just how important succession planning is. Like Apple, many of the outdoor industry’s most iconic brands are closely associated with inspirational founders who are rapidly approaching retirement age. Unlike Apple, however, it appears many have yet to craft exit plans.
“I’m amazed at how many entrepreneurs there are who don’t have a succession plan,” noted Andy Zimmerman, 55, who has been providing consulting services to several clients since resigning as CEO for Legacy Paddlesports in March. “A lot are hoping for that pot of gold at the end of the rainbow but not planning for it.”
Clearly the industry has many success stories. In 2009, Ira and Lynn Wachtel were able to keep Champagne Surplus in the family for a third generation with a sale to their daughter Shira and her husband Daniel Epstien (see related story). Steve Barker retired as president of Eagle Creek in January 2010, three years after selling the company he co-founded with his wife Nona in 1975. In February, Dave Baker announced he was selling the Summit Hut in Tucson to 13-year store employee Dana Davis. Zimmerman is now in the early stages to selling his Get Outdoors store in Greensboro, NC to its manager. He sold another paddlesports shop in Wilmington, NC to a manager years ago.
But for all these success stories there are dozens of 50-somethings in the industry with no succession plan. The lack of planning risks the loss in coming years of dozens of specialty retail businesses which have played such an important role in building outdoor participation and brands.
Consider Mike Garcia, who began investigating the sale of Northern Lights Trading Co. in 2003. After finding and negotiating with a few buyers for his stores in Bozeman, MT, Garcia concluded he could get a better price by growing sales through a second location. By late 2006, he had grown sales 40 percent and hired a business broker to find a buyer. He sold the business in 2008 to a financial analyst who had never been a retailer or worked in the outdoor industry. While Garcia and his son built a business in Chile to import and sell outdoor gear in South America, the man who bought the two Northern Lights stores in Bozeman gobbled up a third store in Missoula and fourth in Bozeman.
Garcia began to notice customer service slipping at his old stores. By 2010, the new owner had shut the store he’s acquired in Missoula and begun liquidating the others. Rather than be left with an empty building and irate vendors, Garcia found a silent partner and took back the business in July 2010. He has since ramped up investment in northernlightstrading.com, but on Saturday closed the Barrel Mountaineering store in Bozeman. At age 58, seven years after he began planning to exit the business, he is back to square one.
“It took 18 months to sell business in 2008 and I still can’t get out of it,” Garcia said. “I’m starting to wonder how retirement fits into my life.”
As Garcia’s example shows, succession planning can be tricky. OIA WebNews will be investigating ways outdoor companies can plan for smoother transitions. If you would like to share your story or concerns, send us an email.