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North Bay Business Journal

Monday, April 23, 2012, 7:00 am

Marmot expanding with lease of former Next Level site

Moving 124 to Rohnert Park, hiring 40 in three years

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    Mark Martin

    Mark Martin

    SANTA ROSA — Marmot Mountain LLC is on track to meet its goal of doubling sales and the number of its new branded stores worldwide, and that has the 38-year-old maker of premium outdoor gear for serious expeditions and sports apparel for technical and everyday use preparing its headquarters and local production facility for a trek to a high-profile Rohnert Park location twice the size this summer.

    Marmot (www.marmot.com), part of the Outdoor Solutions division of Rye, N.Y.-based consumer products giant Jarden Corp., has been waiting to expand for three years until leases on its southwest Santa Rosa buildings expired. The company needs to expand to accommodate new employees and infrastructure such as a new product photography studio and a one-third larger production facility for high-end mountaineering and extreme-weather products, according to President Mark Martin.

    Display from Marmot's San Francisco store

    Display from Marmot's San Francisco store

    The company has 124 employees now in Santa Rosa and wants to hire 40 more over the next three years in sales and marketing, operations and ecommerce. The addition of 124 employees, together with the relocation of Innovative Moldings to Sonoma Mountain Village is good news for Rohnert Park, which has battled high commercial space vacancies, most recently with the loss of 300 employees from State Farm Insurance.

    Marmot also has 56 employees at a 200,000-square-foot distribution warehouse in Reno, Nev., and 36 more in sales and marketing subsidiaries in Canada, the United Kingdom and Germany, where the European market administrative office is located.

    Marmot is on track to double 2010 sales, according to Mr. Martin.

    “We’re in year three of a four-year plan,” he said.

    Marmot signed a 10-year lease with the Coyne family for 43,000 square feet in more than one-third of the landmark 139,000-square-foot former Next Level Communications office building at 5789 State Farm Dr. in Rohnert Park. The building has been mostly empty since Next Level relocated a few years ago.

    Artist rendering of the Marmot sign in Rohnert Park

    Artist rendering of the Marmot sign on the former Next Level building in Rohnert Park

    Marmot also leased 15,000 square feet of manufacturing and storage space — more than one-third larger than the current Santa Rosa plant — from Schulz Family Trust in an adjacent building at 6085 State Farm. Products making up 95 percent of sales are made in China, Vietnam, Bangladesh, El Salvador, Costa Rica and Honduras, but the remainder are high-end mountaineering products made locally to ensure top quality in extreme-weather environments, according to Mr. Martin.

    Marmot has benefited from years of investment in building foreign markets and a serendipitous spike in outdoor product sales as the global economy worsened in the past few years.

    “There has been a huge increase in outdoor camping, and sales of tents, sleeping bags and stoves are at an all-time high,” he said. “Whether it’s the staycation trend or in times of trouble people look to the outdoors as a place of refuge, our brands go with you from a walk in the park after dinner to climbing the highest mountains in the world.”

    The line of products has grown from the early use of Gore-Tex breathable yet waterproof fabric on sleeping bags in the 1970s to include packs, skiwear, gloves, hats and a growing line of men’s, women’s and children’s light-weight yet insulating and waterproof sportswear and everyday clothing.

    Marmot's San Francisco store

    Marmot opened a branded store in San Francisco's upscale Union Square retail district in 2011 and plans to more than double stores globally in three years.

    In addition to a wholesale network for a few hundred stores and Internet retailers, Marmot building brand awareness for its retail distribution and with consumers by opening corporate-owned and partnership stores. Last year, Marmot opened a store in San Francisco’s Union Square, and others are located in key U.S. high-end ski resort areas such as Park City, Squaw Valley and Vail. Marmot now has 23 stores, including 15 partnership stores in Russia, South Korea and China.

    The plan is to expand that to 50 stores in the next three years, according to Mr. Martin.

    Marmot accounts for just a high single-digit share of the $2.77 billion in 2011 net sales for Jarden’s Outdoor Solutions division, which includes the much larger brands Coleman, K2 and Rawlings, but Marmot is the fastest-percentage-growth Jarden brand, according to Mr. Martin. The division was the largest contributor to Jarden’s $6.68 billion in sales last year.

    In the $10 billion-a-year global outdoor products industry, Marmot has a 5 percent share of U.S. sales in outdoor apparel and about 3 percent worldwide, but it has a higher proportion of outdoor equipment sales — 10 percent, according to Mr. Martin.

    After a 7 percent slump in 2009 as the global economy reeled, Marmot sales growth rebounded by 19 percent in 2010, 31 percent last year and somewhat lower double-digit growth is anticipated for this year, according to Mr. Martin. The dip in 2009 was only the company’s second — the first was 2002 in the aftermath of Sept. 11, 2001 —  since the company started as a Colorado cross-country skiing retail and rental shop in 1974.

    Marmot has gone through a number of ownership transfers, starting with the 1990 sale to Speer, Leeds and Kellogg that brought the company to Santa Rosa. A Hong Kong company purchased Marmot a year later, but 10 employees raised funds to buy the assets and trademark out of U.S. Bankruptcy Court. The group merged Marmot with K2 Inc. in mid-2004 in an $84 million stock-and cash deal, giving outdoor products maker K2 a strong presence in the premium end of the technical outdoor apparel market. Jarden acquired K2 in July 2007 for $1.2 billion.

    “There has never been pressure to relocate the company,” Mr. Martin said. “Jarden and K2 were astute enough to realize they would give up growth with a relocation, and for K2 it was a decision to go with the upside of the brand and not (selling, general and administrative expense) savings.”

    Barry Palma of Cornish & Carey Commercial Newmark Knight Frank represented Marmot in the Rohnert Park leases. Shawn Johnson, Jeffrey Wilmore and Brian Keegan of Keegan & Coppin represented the building owners.

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    Comments

    2 Comments

    1. April 23, 2012, 7:52 pm

      by Reza

      Feel happy to work for Marmot !!!!


    2. May 8, 2012, 10:47 am

      by Jeff Quackenbush, Business Journal Staff Reporter

      As Mark Martin of Marmot noted, there is rampant inflation in down feathers, and that is leading to inflation in down-insulated goods such as Marmot’s.

      From “Down Feather Prices Take Flight,” a Wall Street Journal article on May 7: “Prices for goose and duck down, an insulator for winter jackets, pillows and comforters, are flying away, leading manufacturing to raise prices for high end goods as much as 60%.”


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