Rohnert Park’s Marmot overcomes early barriers to become global outdoors outfitter

Even a tug from Clint Eastwood could not pull Marmot high enough for the startup to fly.

When the fledgling Marmot company dangled precariously during its first months in Colorado, Eastwood grabbed its lifeline and yanked upward. Eastwood, director of the Warner Bros. American Sniper movie that has garnered more than a half-billion dollars in worldwide revenue, starred in and directed The Eiger Sanction movie in 1974 about a mountaineer art history professor who doubled as an assassin. The director for 20th Century Fox needed 108 puffy jackets to add down-insulated realism when actors played in snowy mountain scenes.

Marmot's three founders — Eric Reynolds, Dave Huntley and Tom Boyce — hustled to construct their first big order of jackets. The company, based then in Grand Junction, also made sleeping bags and other mountain gear.

The bonanza didn't last. The business eddied then crashed into wipeout. While the 20-something entrepreneurs might have been plucky mountaineers, they bombed at business. Marmot hit a sales plateau at less than $10 million for nearly its first 20 years.

To their credit, the guys set quality standards at high elevation. They meticulously stitched Marmot down jackets and sleeping bags, stuffed them with fluffy goose down. Quality flourished, yet production trudged. While Marmot gained a pristine reputation among climbers for lightweight, reliable gear, store managers found the company maddeningly incompetent. It missed delivery deadlines, sometimes by months.

In 1989, the company botched delivery of its entire winter clothing line, which should have arrived in stores in the fall to buoy holiday sales. Instead, production snafus delayed delivery until January. Marmot blew much of the season's peak sales opportunity.

Struggling financially, Marmot became a takeover target and was acquired in 1990 by Spear, Leeds & Kellogg, a Wall Street investment firm that put skiwear veteran Steve Crisafulli in place as Marmot chairman and then president, and moved the company to Santa Rosa. Crisafulli revamped the company's abysmal delivery performance. In 1991, Odyssey International, a Hong Kong-based conglomerate that owned Sierra Designs, Head and North Face, bought Marmot. The U.S. operations of Odyssey were based in Berkeley.

The intent was to build production efficiencies and boost profits. 'It didn't work out very well,' said Mark Martin, Marmot's current president. Odyssey went bankrupt. In 1993, the management team sought outside financing and failed then finally rounded up $3.5 million among themselves and an outside investor and bought Marmot out of bankruptcy.

Marmot benefited from a serendipity year in which to grab market share from rival outdoor apparel makers Sierra Designs and North Face, also owned by Odyssey and bogged down in its bankruptcy quicksand for nearly a year longer than Marmot.

Martin arrived nearly a year after the buyout, and worked his way up to president by about 2003.

K2 acquired the company in 2004. 'We went from an employee-held company to part of a publicly traded company,' Martin said. Three years later in 2007, Jarden, an $8 billion consumer products company with such brands as Coleman, Sunbeam, Oster and CrockPot, took over K2, and Marmot's business focus sharpened under the new parent.

For the past 2.5 years, Marmot has been based in Rohnert Park. It has 130 employees and revenue of $200 million. Marmot's high-end manufacturing happens in Rohnert Park. Additional manufacturing is in China, Vietnam, Thailand and other countries.

Martin is president of the technical apparel division of Jarden, which has about 350 employees globally and includes Ex Officio and Marker Apparel, a skiwear maker. The division has total sales of about $300 million. Marmot's global employee count is about 225.

Marmot has a managing director in Germany who runs the company's European subsidiary. Another wholly owned Canadian subsidiary is based in Vancouver. A Hong Kong-based director oversees sales in Asia.

In its first 19 years, Marmot 'was almost a hobby for people,' Martin said. 'The brand had a great reputation but never really made money. People would invest back to keep it going.'

Outdoorsy but not to extremes, Martin prefers skiing, fly fishing and hiking. Of his 20 years with Marmot — half the company's life — 'it has been quite a ride,' he said.

Marmot has plenty of competition even in the rarefied air where its best products dwell. Western Mountaineering, based in San Jose, is 'on par,' Martin said. 'It would be hard to say what the nuances are between a Western Mountaineering (sleeping) bag and a Marmot bag,' he said. 'We both make exceptional products — the quality of down, quality of materials, attention to detail in the construction, durability, lifetime guarantee.'

Both companies use specially selected high-loft down — 1 ounce fills 850 or 900 cubic centimeters. 'Better down allows it to loft higher,' he said. Marmot offers sleeping bags in a range of down qualities, including introductory products with 600-fill down that are less expensive at about $225 for a bag that will keep campers warm at 15 degrees Fahrenheit. A top-end Marmot bag for the same temperature rating costs about $600 with the finest down and lightest weight for its insulation power.

For products such as a Gore-Tex shell jacket, Marmot has competitors at the top including Arcteryx, Patagonia and North Face. 'We all make very high-quality Gore-Tex shells,' Martin said. 'Nuances are in design and construction details, in the fit. That's when the brand begins to take shape.' Other competitors at different price and quality levels include Sierra Designs, Columbia and REI.

Martin ranks Patagonia with Marmot at the top in terms of down jacket performance and functionality. 'What they have done though, in my opinion, is to expand into more of a lifestyle' market, in outdoorsy fashion. 'We have some elements of that as well,' he said, in Marmot's MetroTech collection. 'It's designed for that user in the New York metro area,' Martin said, who is 'outside walking on a daily basis, suffers a much harsher climate than we have here in California, but wants to be stylish. We blend performance, functionality and a sophistication of design into the garment at the very high end in terms of pricing.'

Marmot, like other outdoor clothing manufacturers including Patagonia, seeks to reach a much broader consumer audience than just those who are serious about outdoor adventure sports such as climbing and mountaineering. 'The outdoors starts right outside your front door,' Martin said. 'Whether you're choosing to go for a walk in the park, a hike in Annadel or a trip to the Sierras on the trail in a multi-day environment, we want to have a relationship with all those people' to improve their experience.

'We don't want to tell people, if you don't do these hard-core activities, you're not for us,' he said. Marmot is 'about celebrating the outdoors, whether you choose to climb, hike, walk on a trail or on the mountaintop, we want to be a part of your outdoor experience.'

He sees giant opportunity for Marmot in selling sportswear. 'We're great at addressing people when it's cold and wet,' Martin said. 'We want to get better and have a relationship with people when it's warm and dry.' That attire could be for running or gym wear in training.

Marmot has reconfigured its marketing messages for spring 2015 to depict women, for example, doing CrossFit-style core-strengthening activities indoors at a gym then using that strength outside while bouldering.

'We call it training for the adventure, getting stronger in order for the adventure to be richer,' Martin said.

'That female customer is incredibly vital' to the company's growth, he said. Half the style offerings are now for women. Sales still tilt 60 percent to men and 40 percent women. He expects the sales ratio to move toward 55 percent men to 45 percent women. In sportswear, sales are already gender-even.

'We remain committed to the top of the mountain,' in terms of quality products for extreme sports enthusiasts, Martin said. But that rarefied market is small and slow-growing. 'We recognize that there's another group of people that we can have a relationship with,' he said, and that group is much larger than the market for mountaineering gear. 'Our challenge is how to introduce the brand to a new customer.'

To build awareness, Marmot sharply boosted its television and digital advertising to reach new customers, and pushed deeper into print. Online purchases account for less than 5 percent of direct Marmot sales. Some retail partners such as REI and Backcountry.com show as much as 25 percent from online. Web sales are higher in the United States than elsewhere.

'Half the people who go into an outdoor store already have a brand in mind,' Martin said. 'They buy that brand 92 percent of the time.' The market battle is about 'mind share before they cross the threshold. We need to make sure that Marmot is a brand that's top-of-mind,' he said.

'Once we get them purchasing and using a product, then we win,' he said. 'We don't have fallout' of customers who try Marmot products and have bad experiences — the jacket leaked, they got cold, it didn't fit right. 'Those are not the challenges for this brand,' he said. 'We don't show the outdoors as a place of suffering. We show it as a place of enjoyment,' not solo but with groups of companions.

Building an outdoor brand poses challenges even in aligning with superstars. Kevin Jorgeson, the Santa Rosa climber who in January with partner Tommy Caldwell finished a historic free climb of the Dawn Wall of Yosemite's El Capitan, 'was a Marmot athlete since he was probably 8 years old,' Martin said. Jorgeson sought a 'different sponsorship structure' and moved on to Adidas Outdoor. Adidas is based in Germany.

Caldwell also was a former Marmot athlete who shifted to Patagonia. 'This is no different than baseball or football,' Martin said. 'They're going to go for whatever the best offer is financially. Good for them. We were thrilled when we had Tommy and Kevin as part of our team. What an amazing accomplishment.'

The company is building its lifestyle lines of clothing with refined flannel shirts, for example, intended for fashionable yet functional daily wear. During the interview for this story, Martin wore a synthetic plaid shirt that looks like wool. 'It's incredibly soft,' he said, 'but with a performance fiber' to wick moisture away from the skin. 'It's a beautiful product.'

That principle — high performance blended with good looks — applies to all Marmot products. 'Ugly doesn't sell,' he said. 'That's one of the biggest evolutions of the outdoor industry. It looks good, fits their (active) lifestyle. We connect people with their passions.'

Having Jarden as corporate parent has allowed Marmot to grow during the past seven years and solidify its market position. 'It starts at the very top. The CEO (James Lilllie) and president (Ian Ashken) are incredible supporters for the brand,' Martin said. 'They have been very much behind us. They understand the opportunity. Now how do we execute on that?'

Jarden is the 14th-largest importer of containers in the U.S., he said, and that heft results in buying power and low rates on freight and materials. A giant company, Jarden can negotiate favorable media rates. 'We can take those savings and invest them back in the brand,' he said.

Jarden acts as Marmot's bank. 'In a small, growing business, the banking relationship is vital,' Martin said. 'If the bank doesn't understand where you're going and the opportunity, they're not going to give you the resources and funding to achieve the growth. Jarden makes that very easy.'

In Jarden's large outdoor products division, Marmot is one of the company's 'strategic growth initiatives,' positioned, for instance, quite differently than Coleman, also a Jarden brand. 'With that comes the investment.'

Marmot has nearly 100 stores worldwide, including one on Post St. in San Francisco. Seven such company-owned stores are in the United States. Three are in Europe. There are dozens of partner-distributor stores bearing the Marmot banner. South Korea has the most, with 45. China has 20; Russia, eight; Japan, six; and Chile, two.

'The South Korean market is one of the strongest outdoor markets,' Martin said. 'They have easy access to their national parks. South Korea is quite progressive in setting aside land and marine parks. They have a very dense population with easy access to mountains.'

Seoul, for instance, is located a 45-minute train ride from mountainous terrain. South Korea's strong economy has provided many workers with discretionary income they can use to load up on Marmot products, including jackets, tents, backpacks and sleeping bags.

High store rents in favorable retail locations limit the growth of domestic stores. 'Downtown San Francisco on Post St. is pretty expensive,' Martin said, noting that the store ekes out a profit. Other stores in Chicago, Aspen and Vail are also in pricey districts. Seattle and Portland might offer potential new store markets with lower rents but plenty of outdoorsy customers. 'That rent component is really the wild card,' Martin said.