A little less than a month after outdoor companies with Chinese supply chains got some relief from a preliminary trade deal, they’re now reeling from work stoppages caused by the coronavirus outbreak.

Large outdoor apparel companies VF Corp. and Columbia Sportswear are losing sales at retail stores that have been temporarily closed in China, where travel has been sharply curtailed to help stem the spread of the virus. But they aren’t saying much about the potential effect on their supply chains, which include manufacturing operations in China. Meanwhile, smaller companies told şÚÁĎłÔąĎÍř Business Journal their production remains halted even after the conclusion of the Chinese Lunar New Year holiday, which was extended because of the outbreak.

Printing, embroidery, and sewing operations remain closed at the factory near Shanghai that produces hats for Boco Gear, a Colorado-based custom headwear maker, the owner of the factory, Geng Gaotun, tells şÚÁĎłÔąĎÍř Business Journal.

“This is the longest holiday I have had but the worst,” Geng told OBJ via email from Las Vegas, Nevada, where he was stranded as many flights into China were cancelled.

His factory still has orders its needs to ship this month, but Geng isn’t sure if it will be able to fulfill them. Local printing workers may not be able to return until February 25, and the factory may not be able to resume embroidery and sewing operations until the end of the month. Meanwhile, a separate factory that makes beanies for Boco remains closed, with that owner hoping it could re-open February 20, Boco CEO Kay Martin tells OBJ.

To help deal with February orders it couldn’t push back to March, Boco, which has a relatively agile manufacturing footprint because of its quick turnaround business model, sent some orders to Vietnam for production. But there’s not enough manufacturing capacity there to fulfill all the orders Boco is expecting to book for March, which is traditionally a busy time for the company.

“If this stretches beyond March, we’ll lose orders,” Martin said.

Outdoor industry heavyweights are also grappling with the fallout from the outbreak.

VF Corp., which owns , said in a statement last week that it’s too early to gauge the impact of the virus on its supply chain in mainland China, where approximately 16 percent of its cost of goods sold is sourced directly.

The company is also facing a near-term hit to its sales as around 60 percent of the company’s owned and partner retail stores in China have been temporarily closed. Stores that have remained open are seeing significant declines in foot traffic. During the 2019 fiscal year, mainland China represented 6 percent of total VF Corp. revenue.

Columbia Sportswear CEO Tim Boyle said on a conference call that the virus is “having an immediate impact on our business in China, including the effects of store closures and lower store traffic at stores that remain open.”

He said it was too early to forecast the financial impact on Columbia’s business, including on its sourcing, production, and supply chain. Chief operating officer Tom Cusick added that Columbia’s spring 2020 production is largely completed, but orders are in process for the fall line, which is where most of the coronavirus’s threat to the company’s business lies.

Meanwhile, CEO Dani Reiss said on a conference call that the company expects it will be able to offset any supply chain impact in the long term with buffer inventory built up over the last year.

As for Canada Goose’s retail operations, revenue in China is at “negligible” levels across its entire store network, including its most significant online markets, Jonathan Sinclair, the company’s chief financial officer, said on the call. The impact has also been spreading to major shopping destinations in North America and Europe, and Canada Goose has lowered its annual revenue growth guidance to 13.8-15 percent when it had been expecting average annual revenue growth of at least 20 percent.

While Canada Goose produces clothing in Canada, it sources raw materials from suppliers in China, and a prolonged disruption could affect its ability to do that, the company said in a regulatory filing.

For outdoor industry companies, the chances of shipment delays increase the longer disruptions from the outbreak go on, two industry analysts tell şÚÁĎłÔąĎÍř Business Journal.

Supply chain delays that stretch into March could start to affect shipments for the back-to-school season, said Wedbush Securities analyst Chris Svezia, who produces research notes for investors about publicly traded footwear and apparel companies including VF Corp. and Columbia.

And once shipments resume, there could be bottlenecks at ports trying to get them out, potentially forcing companies to use more expensive air freight services out of China, said Stifel Financial Corp. analyst Jim Duffy, who also covers Columbia and VF Corp. among other sports and lifestyle companies.

Management at Swedish glove maker Hestra is considering moving as much production as it can out of China and into Hungary and Vietnam if the coronavirus timeline drags on, Dino Dardano, president of Hestra USA, told şÚÁĎłÔąĎÍř Business Journal. The company has been planning to move its manufacturing out of China anyway because of difficulty finding labor as well the U.S.-China tariff situation, but it would accelerate those plans if the coronavirus outbreak lingers.

Hestra’s two jointly owned Chinese factories in Shanghai and Guangzhou are shuttered at least until February 17, Dardano noted.

“Our fear is that it’s going to continue for weeks, if not months,” Dardano said, echoing concerns from the outdoor industry about the outbreak’s duration, a key factor in determining the extent of the impact on companies’ sales and manufacturing.

Although outdoor apparel companies are facing lost retail sales and an uncertain production outlook because of the new coronavirus outbreak, the industry as a whole is less vulnerable than it was when a similar epidemic occurred nearly two decades ago.

In general, outdoor apparel makers are less reliant on Chinese production now than they were during the 2002-2003 outbreak of severe acute respiratory syndrome, or SARS.

Many companies in search of cheaper labor have diversified their manufacturing to places like Vietnam, Bangladesh, Indonesia, and Ecuador. Also, China’s decades-long one-child policy has made the Asian nation less attractive for clothing manufacturers because there aren’t enough younger workers to replace aging retirees. Recently, the trade war between the United States and China accelerated the process of companies reducing their Chinese production footprint.

Swedish glove maker Hestra already had plans to eventually exit manufacturing in China entirely because of the labor issue, said Dino Dardano, president of Hestra USA. But it accelerated its move into Hungary and Vietnam because of the recent tariff turmoil. This year, it was planning to make about 80 percent to 85 percent of products outside China, even before the coronavirus outbreak.

Another key difference between now and the early 2000s for the outdoor apparel industry is the ubiquity of e-commerce. But its offsetting effect on lost brick-and-mortar sales is a mixed picture in China at the moment.

While Nike said in a recent press release that its digital commerce business in China was showing “continued strength,” Canada Goose’s chief financial officer Jonathan Sinclair said on a conference call that revenue from the outerwear maker’s most significant online markets in the nation was “negligible.”

Although e-commerce sales have the potential to mitigate some of the losses from traditional stores, there is still the question of how orders get delivered, noted Mitch Kummetz, an analyst with Pivotal Research Group who covers footwear and apparel companies.

“Travel restrictions have essentially cut-off all traffic from mainland China, and local activity is almost at a standstill,” Sinclair said on the Canada Goose call. “SARS unfortunately, it’s still fresh in many memories.”

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The history of what is now outdoor clothing fabric manufacturer Polartec is essentially a tale of two companies.

Long known as Malden Mills, the Massachusetts company revolutionized the outdoor industry by inventing synthetic fleece, but it also stumbled financially and endured a major fire before being bought by a private equity firm that changed its name to Polartec.

Now that private equity company is making another change by moving the company’s manufacturing operations from Massachusetts to Tennessee, closing a chapter on one of the most storied of New England’s textile mills and leaving a wake of disgruntled union workers.

Polartec CEO Gary Smith defended the exit from the factory in Lawrence, Massachusetts as a business decision necessary to keep the company competitive.

Meanwhile, negotiations with union workers in Massachusetts—who have protested the company’s exit and have tried to interest Patagonia in buying Polartec—have been contentious, although the two sides have recently come to terms. The closing Lawrence factory is losing 400 jobs, while the plant in Tennessee will employ more than 200 workers.

The decision to exit the Lawrence factory, which has been home to what is now Polartec since being rebuilt after a 1995 fire, came amid many factors. Among them, energy costs in Massachusetts are high relative to the rest of the United States, and the plant itself is much too large, Smith said. At its most productive, Polartec has only been able to utilize 25 percent of the plant’s capacity, making it cost ineffective.

The size and configuration of the factory had caused the company to struggle since before private equity firm Versa Capital Management, then known as Chrysalis Capital Partners, bought the company out of bankruptcy in 2007 and renamed it Polartec, Smith said.

The Lawrence factory that reopened after the fire, “was overbuilt to begin with,” Smith said. And by the mid-1990s, there was formidable competition for double-sided fleece from other producers, including those overseas. After years on the market, the fabric that Malden Mills invented had become commoditized.

The company can’t just downsize the plant and only use a fourth of it because it isn’t configured that way, Smith said. He compares it to a house; if someone wanted to only use 25 percent of the house, that would mean the kitchen and bathroom would all have to be moved to that section. The cost of doing the equivalent with the factory is prohibitive, he said.

“All in, it’s hard to make a case to stay here,” he said. Polartec plans to eventually sell the buildings.

Negotiations with the Union

The union—which now represents a little over 100 Lawrence workers, down from about 350 before the announcement the plant would move—views the relocation as a bid for cheaper labor.

But Smith said the decision isn’t so much about cost savings as it is about flexibility of the workforce. Workers at the Tennessee mill are cross-trained on different machines, an advantage Massachusetts union workers do not have, he said. Wage rates for the same jobs in Tennessee are similar to Massachusetts wages, Smith said.

Although he couldn’t give actual labor costs for the company, and he admits that hiring over a hundred newer workers has brought down the average wage, he says labor is not a material difference. “It’s not a cheap labor play,” he said. Rather, the non-union workers in Tennessee are more productive per hour, he said.

Ethan Snow, chief of staff and political director for the New England Joint Board Unite Here, the union representing the Polartec Lawrence-based hourly production employees, contends that the health insurance, retirement plans, holidays, and sick leave the union has negotiated over the years make the Massachusetts workers more expensive, meaning the company will save money on labor by the move to Tennessee.

The union wanted at least a week severance for every year of service, but the company only offered four weeks severance, an offer the union rejected.

“It’s not that they don’t want it; it’s that they feel insulted,” said Eddie Quiles, president of the local branch of the union who has worked at the company since 1994. “If the company was going out of business or going bankrupt we would understand. But this company is doing well. Why couldn’t they do a little better?”

In the end, the union ended up getting a better offer, with Polartec offering eight weeks of severance to those who have been laid off or will be and nine weeks for those with 20 years of experience.

The Polartec union’s contract was set to expire at the end of October, so the company was accelerating the shutdown of the Lawrence plant and planning to keep a non-union crew on site to wind down operations, Smith said. But as part of the negotiations, the union agreed to a contract extension.

“Gaining the breathing room with the union certainly helps,” Smith said.

A Fire and Financial Woes in a Different Time

The current relationship with Smith and Polartec is a far cry from what some long-term employees remember.

The 1995 blaze that came to be one of the defining moments in the company’s history and that propelled then-CEO Aaron Feuerstein to corporate sainthood in the public eye started not in the Lawrence factory’s fleece segment, but it the part used to make flocking, which is used in upholstery.

“There were people crying as the walls were collapsing,” said Quiles, who lives in Lawrence.

He recalls Feuerstein coming to the scene and comforting workers. The next day, Feuerstein told them he would continue to pay them while the mill was rebuilt.

“We were very happy (with) this gracious CEO who had shown compassion,” he said. “None of it was about corporate greed.”

But once the smoke cleared, Feuerstein’s compassion was not enough to keep the company healthy. In 2001, it filed for its second bankruptcy. (The first was in 1981.) Nor did the company’s financial troubles end after Feuerstein was replaced as CEO. It filed for protection against its creditors again in 2007

In a recent phone conversation, the 90-year old Feuerstein said Polartec’s move to Tennessee is a “disgrace.” Versa “didn’t consider the workers,” he said.

“These people are only interested in making profit,” he said. “They have no interest in the welfare of workers. I considered workers stakeholders in the business.”

Versa declined to comment for this article.

Moving Forward

Last fall, Polartec acquired United Knitting, in Cleveland, Tennessee, giving the Massachusetts company a new facility with only about a quarter of the capacity of the Lawrence factory.

Polartec has been upgrading the Tennessee facility’s utilities and infrastructure, and the ramp up was about 80 percent complete as of October 17, Smith said.

During peak production, the Tennessee factory will be 100 percent utilized, he said.

The company won’t export union jobs from Massachusetts to the non-union facility in Tennessee, and the loss of the Lawrence plant—one of the last vestiges of the once-great New England textile industry—has upset workers.

In June 2016, they went so far as to send a letter to Patagonia’s CEO Rose Marcario asking the company, “already a major purchaser of Polartec’s products, to buy Polartec and continue operations in Lawrence.”

The union didn’t hear back from Patagonia, Snow said. Patagonia representatives did not return a request for comment for this article.

But Smith said it wouldn’t make sense for Patagonia to buy Polartec because the California-based company doesn’t do its own manufacturing. “They never have been and never will be in the business of making things,” he said.

The downsizing of manufacturing is part of Versa’s exit strategy for Polartec, but the changes shouldn’t be blamed on the private equity firm that specializes in buying already distressed assets and trying to turn them around, Smith said.

“(Versa) didn’t put (Polartec) into distress; they bought it out of distress,” he said, adding that without Versa, the jobs being lost now would have been lost a decade ago. “(Versa) buys things that are broken and bleeding.”

Because Polartec is in a private equity portfolio, that means that by definition it is for sale. But the company is not actively pursuing a transition at the moment and doesn’t have an investment bank representing it for sale, Smith said.

Companies such as 3M and Invista would make more sense as logical purchasers for Polartec, and they have expressed interest in the past, he said. There are also some Asian companies that could be a logical fit, he said.

Regardless, it is unlikely that any so-called strategic buyer—operating companies rather than investment companies such as private equity—would touch Polartec if the Lawrence factory were still operating, Smith said.

No strategic buyer wants to buy the plant and close it down themselves because of the high emotions tied to it, he says. But “somebody has to do it,” he said.

Fleece Is Not Dead

Over his more than three years as CEO of Polartec, Smith has focused on diversifying the company.

When he inherited Polartec, the business was well represented in traditional outdoor brands but not in fitness and lifestyle products, he said. Over the last decade, it had also become too dependent on outdoor and military sales, he added.

Smith said the boom in down and lofted synthetic insulation hasn’t hurt the fleece market. “There is this misnomer in the outdoor space that fleece is dead,” he said.

While fleece is being sold less as a fabric for technical outdoor wear these days, he says there is more fleece being sold in general than ever before.

Fleece has a much broader market than puffy insulation because of its versatility and its fashion aspect, said Kathy Swantko, president and founder of FabricLink Network, a textile, fiber, and fabric networking, marketing, and education business.

Fleece can be printed, made to different lofts, made with blended fabrics and fibers, and made into specialty fabrics like fleece Spandex, she said. It’s also less expensive than lofted insulation and can be sold more easily in Targets and Wal-Marts.

The fabric has crossed over from the outdoor market to more fashion markets, and even the classic outdoor fleeces such as high-loft varieties are making a comeback driven by Millennials, who weren’t active purchasers when those products were first in their heyday, she said.

Optimism About Polartec’s Future

These days, Smith is pleased with how the company has penetrated the cycling market, with Polartec fabric in cycling brands including Sportful, Rapha and Giro. On the fitness side, Adidas’ Terrex outdoor product line has also added to Polartec’s growth, he said.

The diversification is due to new fabric innovations as well as pushing existing fabrics into different markets, he said.

Continued innovation is everything to Polartec, he added. There are a lot of companies that can make a fabric, but there is little global capacity for actually creating a fabric, which involves significant investment, he said. Polartec has more than 50 full-time engineers, technicians, and chemists dedicated to product creation.

The company now also has very little debt, he said. If it is successful in selling the Lawrence property when the transition to Tennessee is complete, the company will be debt-free, he said.

Polartec’s headquarters and research and development operations will remain in Massachusetts a few miles from Lawrence, with 100 jobs staying in the state, including management, finance, human resources, and product development positions, Smith said. The company also has operations in New Hampshire and China.

“The company is… a turtle that’s very healthy,” said Smith. “It’s just been carrying a shell that’s way too big. The turtle can’t keep dragging this [factory] around.”

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Mark Ritchie, president of Black Diamond Equipment, has been doing some coloring lately.

There’s a white coffee mug on the glass table in his office with a logo saying Black Diamond 2.0, in a reference to when the iconic American climbing and skiing brand sold shares to stock market investors as part of an expansion strategy in 2010.

Recently Ritchie took a red marker and drew a comma-shaped line on the bottom of the 2. Now, the cup says Black Diamond 3.0 to acknowledge a new phase in the company’s history. Black Diamond has scaled back its ambitions to be a major player in outdoor apparel and is returning to a focus on its core customer base of climbers and backcountry skiers—even as its parent company, Black Diamond Inc. (BDI) looks to make an acquisition outside the outdoor industry. “We can achieve levels of growth without going into categories that take us out of our competencies,” Ritchie said.

The move to re-focus on climbing comes as indoor rock gyms are making the sport more popular than ever. According to Climbing Business Journal, the number of gyms in the United States—currency around 400—will grow about 15 percent this year. And an Outdoor Foundation survey found that traditional climbing, including mountaineering, was one of the top ten fastest growing outdoor activities over a three-year period to 2014.

But returning to its roots hasn’t been easy. In addition to cuts in its apparel line and layoffs, the company has brought back manufacturing to Salt Lake City from China, leading to recalls of several different products including more than a million carabiners in February and April. And Zeena Freeman, president of BDI for less than a year, departed before having the chance to take the CEO job as planned from longtime company leader Peter Metcalf, who has since retired from most of his duties at the company.

Manufacturing Issues

Black Diamond’s headquarters consist of several buildings nestled at the foot of 9,026-foot Mt. Olympus in the Wasatch Range of northern Utah. The buildings, which have a Tudor style motif, used to be a shopping center before the company took them over in the 1980s.

Donning safety glasses and walking the factory floor where workers assemble cams and machines bend carabiners into shape, it’s not hard to imagine this as the grown-up child of the legendary Yvon Chouinard shop, especially as the sparks fly from the machine punching out crampon teeth. Kasey Jarvis, director of design with Black Diamond Equipment, called it “the new garage of the Tin Shed” in a reference to the Ventura, California, workshop that ultimately spawned Chouinard Equipment, Patagonia, and Black Diamond.

But moving manufacturing back here from China, prompted by rising labor costs there and a desire to house design and manufacturing under one roof, has not gone smoothly. The company rushed the process of packing equipment into containers, shipping them, setting them up, and making sure everything worked well, said Ritchie, whose previous duties during two decades at the company included responsibility for quality assurance.

That coincided with strong demand for Black Diamond’s core climbing products. Additionally, the company changed its manufacturing line by altering packaging and anodization. As the company tried to bring in new employees to staff three shifts, it underestimated how difficult it would be to find the workers needed (given the Salt Lake City area’s low unemployment) and to sufficiently train them to fully implement existing quality control, Ritchie said.

“We had a bit of a perfect storm,” he added.

Ritchie emphasized very few parts made it though final quality control that weren’t up to snuff. The company could have handled the problems through its warranty department, but decided to do the full recall because of safety for all users, including those who work at Black Diamond, as well as the company’s reputation for quality, he said.

“This place agonized over what to do about all of this,” he said.

While Ritchie does expect to lose some market share to competitors because of the manufacturing issues, he estimated Black Diamond will have caught up to normal levels of product availability by the end of July.

Sean Gavin and his wife Liz—who just last month used Black Diamond carabiners and crampons in an attempt on Denali’s West Buttress route—have considered whether to continue buying the company’s gear.

The husband recalled working on the sales floor and as an instructor at REI from 1999 to 2006, when he and his fellow employees had a joke that Black Diamond did their product testing on consumers because of the amount of recalls it issued. But he says he remains loyal to the brand because it’s some of the best climbing gear out there, it lasts, it’s easy to use, and the numbers of units affected in announced recalls seem pretty low.

“We wish we had a little more faith in the company, but at this point we have enough faith in our experience with their products to over look the incessant recalls,” he said.

One of Black Diamond’s larger customers, REI, seemed satisfied with the company’s approach to the recent manufacturing issues.

“REI expects our vendors to take appropriate actions when product safety issues arise,” an REI spokeswoman said in an email. “Black Diamond has acted quickly to cooperate with the CPSC (U.S. Consumer Product Safety Commission) and address the issues they have discovered.”

Malcolm Daly, who founded and formerly owned Great Trango Holdings and now sells climbing gear at Neptune Mountaineering in Boulder, Colorado, said product recalls in the climbing industry aren’t that uncommon, even from companies with reputations for high quality. He sees three or four recalls a year among all climbing brands the store sells, which basically run the gamut of industry brands out there. And during his nearly 19 years with Trango, the gear company had five product recalls.

Despite the Black Diamond recalls, Daly feels it remains a solid brand, and the company did the right thing by voluntarily recalling all the gear despite only a small number of defects found.

“They know the seriousness of this,” he said.

New Corporate Direction

The Black Diamond story is really a tale of two companies—Black Diamond Equipment, the longtime innovator in climbing and skiing gear, and Black Diamond Inc. (BDI), the newer corporate entity designed to hold the Black Diamond brand and other brands.

In 2010, after two decades of being privately held, Black Diamond Equipment was acquired by Clarus Corp. along with Gregory Mountain Products, bringing both marquee brands under one publicly traded holding company. Clarus then changed its name to Black Diamond Inc.

In 2012, BDI bought PIEPS Holding, a snow safety equipment company, and Poc, a manufacturer of protective gear for action sports participants, as brands to go alongside Black Diamond Equipment and Gregory.

BDI sold Gregory for $84 million in 2014 because it saw the opportunity to get a good price for the brand, Ritchie said. Last year, it put Poc, as well as Black Diamond Equipment and Pieps, up for sale in two separate auction processes, said BDI chief financial officer Aaron Kuehne. It was only able to sell Poc. There was interest in Black Diamond Equipment and Pieps, but BDI wasn’t able to reach an agreement on valuation for the two brands, he said.

The sales of Gregory and Poc cut the company’s staff by around 85 employees, and around 30 more have been laid off amid other streamlining efforts, Kuehne said. Black Diamond’s exit from manufacturing operations in China cost around 250 jobs in the Asian nation, he said. Black Diamond now has around 400 employees at its U.S. and European locations.

Now, the parent company plans to take capital from the sale of Gregory and Poc and make an investment outside of the outdoor industry, said Kuehne, who added that a specific acquisition target has not yet been identified. That new company will be alongside but separate from Black Diamond Equipment and Pieps, while the holding company will change its name to avoid confusion between the Black Diamond brand and the holding company.

The BDI strategy was to attempt to emulate the model of VF Corp, which is a lifestyle apparel, footwear, and accessory holding company that owns many brands including outdoor companies The North Face and Timberland, said executive chairman Warren Kanders. That way BDI could hold different brands but have efficiencies with the same back office platform, but the “management team led by Peter just wasn’t capable of doing that.”

Metcalf disagreed that the company was trying to model itself on VF Corp. and said he is “proud of all we achieved in the time I was the CEO/president” including the apparel launch, Gregory sale and the acquisitions and integrations of Poc and Pieps.

Black Diamond’s leadership realized the company wasn’t growing as it hoped and the apparel business was not doing as well as they would like, said Ritchie, who noted the brand wasn’t well known outside of its niche and it would have taken years to get wider market recognition.

The company ended up dialing back its goals for ultimately creating a $250 million-revenue apparel business by 2020, with Kanders saying that initiative was overly ambitious.

So now, instead of leading with apparel, Kanders said Black Diamond Equipment has “gone full circle” by refocusing on leading with hard goods, including climbing and skiing gear. “This brings us back to where Black Diamond and Chouinard Equipment started, making things under one roof,” he said.

While Black Diamond may well retain its status as a top brand, its parent company’s share price has been faltering. As of Wednesday afternoon, its stock had fallen more than 56 percent over the past year. Kanders, who is the largest shareholder, says the company’s announcement that it would explore the sale of its brands attracted a certain type of investor who then sold shares after that strategic alternatives search was concluded. He added that he believes BDI’s shares are trading below what they are worth, but that the company is not too focused on its share price. “I’m comfortable with the value of the business,” he said.

Mark Smith, consumer goods analyst with brokerage and investment bank Feltl and Company, said BDI is essentially back to square one, focusing on manufacturing. Black Diamond is a good brand, but there isn’t a catalyst for large scale growth in the parent company’s shares in the near future, with the exception of it making an acquisition, said Smith.

The company’s stock price rising depends on it acquiring good assets instead of just relying on the growth of the Black Diamond brand, said Jim Duffy, sports and lifestyle brands analyst with Stifel Nicolaus, a brokerage and investment bank.

Management Changes

Amid the changes in company direction, BDI announced in August 2014 that it hired Freeman to replace Metcalf as president and, it was expected, to replace him as CEO in June 2015.

When Metcalf signed a three-year agreement tin 2010 to lead BDI when the company went public, he was already eyeing an exit that would allow him to spend more time doing things he enjoys. “I wanted to climb more,” Metcalf said.

At the end of that three years, Metcalf said he told Kanders and executive vice chairman Robert Schiller “that I was ready to move on and we needed to get serious about finding my replacement.” But that process went slowly, and the board asked him to stay on as CEO until the strategic alternatives search was concluded, he said. “At the time I departed I was more than ready, as it was nearly 18 months past when I had planned to depart,” he said.

Kanders acknowledged that Metcalf had other goals when he says “it was the right time” for him to go. But he also says that Black Diamond’s growth from revenues around $10 million to a $150 million company requires a different type of management skills.

However, the company’s planned replacement for Metcalf didn’t work out. Even though Freeman had experience with segments of large multinational companies including Sony and Aditya Birla Group, “her experience was not broad enough to manage our overall business,” Kanders said. According to Metcalf, Freeman didn’t have experience with the action sports Black Diamond specializes in. Freeman declined to comment about her departure from the company.

Metcalf said the current management team at Black Diamond, with whom he worked for more than two decades, won’t take the company in the wrong direction. But he added that it is still dealing with the scale of the strategy shifts and the speed with which the manufacturing changes were implemented.

Growing a business while staying true to its roots is a challenge, especially in the outdoor industry, where companies have to adjust to a constantly changing customer base or risk losing business, Metcalf said. But at the same time they have to be wary of innovating themselves out of their main market, he added.

Despite BDIs plans to go outside the outdoor industry, Ritchie isn’t worried about the parent company diluting Black Diamond Equipment’s identity because it will remain its own brand.

Black Diamond Equipment’s employees are aware that the climbing and skiing gear they make are niche, low volume products, Jarvis said. So if the parent company’s ventures can protect and stabilize the brand’s core products, then he’s all for it.

If not, “we would all freak out.”

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Stephan Aarstol’s appearance on ABC’s reality business show Shark Tank did not start out well.

The founder of California-based Tower Paddle Boards found himself awkwardly silent after a problem with his slide show caused him to lose his train of thought.

He swore. Kevin O’Leary, one of the “sharks,” as the celebrity investors are known, quipped, “Don’t worry, it’s only your biggest moment in your life.” Shark Barbara Corcoran is shown later calling him “the worst presenter I’ve ever met.”

Somehow, after the sharks are shown asking questions and breathing life into the discussion, he managed to keep the interest of two of them, eventually landing a $150,000 investment from billionaire Mark Cuban.

“I’m known as the worst pitch in the history of Shark Tank that still got a deal,” said Aarstol, adding that being on the show helped boost his 2012 sales to $1.3 million from $265,000 the prior year.

For Aarstol and other outdoor and lifestyle entrepreneurs, risking looking foolish in the face of snarky remarks, braving the nerves that come with a national television appearance, and facing the unknowns of the editing process all paid off, even for those who ended up not securing an investment.

Matthew “Griff” Griffin, CEO of Washington-based footwear, clothing and accessory company Combat Flip Flops, said going on the show wasn’t quite as nerve-wracking, given his previous career as an Army Ranger with tours in Afghanistan and Iraq.

After all, “Nobody’s going to shoot at us or kill us on the show,” he said.

Much of the stress for him came before entering the Tank. From April to June 2015, he and his team watched every episode and tracked trends in questions and responses.

The hard work paid of with a three-shark deal for $300,000 for 30 percent of the company. In the first 36 hours after the show aired in February, the company’s revenues exceeded its sales of $300,000 for all of 2015, he said.

Extensive preparation also paid off for David Toledo, co-founder of Power Practical, which makes backcountry USB charging gear. He had previous investors in his company pretend to be sharks while he refined his pitch. Power Practical ended up with a $250,000 deal from Cuban in a show that aired in 2014.

Of course, no matter how much the entrepreneurs prepared, they didn’t control how the footage was edited. Some participants said the editing process can result in an aired segment being comprised of footage that isn’t necessarily arranged in chronological order.

Steven Sashen, CEO of minimalist footwear Xero Shoes, waited for months to see how his segment turned out, afraid he and his wife would end up looking like “morons” after the editing.

Their pitch was nerve-wracking, with sharks either firing out questions that sometimes overlapped or seemingly ignoring him at other times, he said.

He ended up happy with how the segment turned out even though parts that didn’t go well for Xero Shoes made it on the air. O’Leary, who ended up making Sashen and his wife an offer they thought was too low, called them “probably delusional entrepreneurs.” Corcoran said Sashen gave her a headache and reminded her of her first husband.

Sashen says he didn’t take the jabs personally because, after all, the Shark Tank team is trying to make good TV.

It was more difficult for Kristina Guerrero, CEO of pre-packaged dog-food bar maker TurboPup, to not take things personally. And who could blame her? During her episode in 2015, O’Leary said her small sales compared to the multi-billion-dollar pet food industry was “TurboPoop on a stick.”

“To me my business is my kid,” she said. “When you have five really brilliant entrepreneurs who are really successful whose opinions matter ripping things apart … it’s tough.”

But being in that “boxing ring” with the sharks turned out to be well worth it. A $100,000 deal with shark Daymond John has enabled her to expand to about 1,200 stores, up from around 50 prior to the show. She is also getting ready to launch a new line of dog snacks.

Despite all the preparation, cameras, and editing, Shark Tank is far from fake or scripted, some participants said.

Shark Tank has a lot of “integrity,” with the entrepreneurs deciding how to pitch their products, instead of producers prodding them to present them a certain way, said Anna Stork, co-founder of portable solar lighting maker LuminAID. She was featured in February 2015 and inked a deal with Cuban for $200,000.

There also aren’t retakes if participants mess up, said Jeff Popp, co-founder of Co.alition, a mobile electronics-compatible backpack maker that didn’t seal a deal on air.

“The authenticity of the show was pretty awesome,” he said.

Even though neither Popp nor Sashen inked deals on the show, they still saw benefits from being on air. After all, the show has millions of viewers every week. Xero Shoes did about three month’s worth of sales in the week following the first airing in 2013, Sashen said. Popp said going on was valuable exposure for the brand.

Companies going on Shark Tank really can’t lose, even if they don’t get an investment deal, because they get valuable feedback throughout the process, in addition to the potential for increased sales and website traffic, Popp says.

“It’s a valuable experience,” Popp said.

The companies in this article that ended up doing deals also have seen benefits that have gone well beyond the collective $1 million they raised from investors.

The most valuable thing for Toledo has been retail leads he’s been able to get from companies wanting to sell his products, including German retailer GlobeTrotter. Being on the show also helped Toledo close deals with REI and Cabela’s.

Anecdotal evidence seems to suggest Cuban often perceives outdoor companies quite favorably, but he declined to comment for this story. Stork said Cuban’s team has been a great resource with help with accounting and strategic and intellectual property advice.

While the original broadcast helped boost Tower Paddle Boards 2012 sales to $1.3 million from $265,000 the prior year, re-airings and an update show continue to send sales traffic its way, Aarstol said. In 2014, the San Diego Business Journal named it the fastest growing private company in the city. It made the Inc. 500 list last year. And this year, the company is on track to do around $10 million in sales, Aarstol said.

“Shark Tank jumped us forward two or three years,” he said.

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