Climbing Back Up The Mountain

Sometimes saving a brand means making tough choices. In order for Eastern Mountain Sports to regain its foothold as a premier outdoor outfitter, it may have to cut loose many of its customers.

Will Manzer isn't chicken. On the contrary, the 52-year-old CEO of outdoor retailer Eastern Mountain Sports looks more like he might just pick a fight for the hell of it. Lean, bald, and caffeinated, he's prone to bounding from his chair and racing around his desk, arms reaching out to illustrate a point. The man even listens fiercely — peering, ears cocked, as if he might beat you to your own thoughts. It's the kind of intensity that has earned him the nickname "Mad Dog" at the company's headquarters in the woods of Peterborough, New Hampshire. But chicken or not, Manzer is running for his life. And he's taking the 37-year-old company he bought last year with him. Call it a fighting retreat.

EMS, an 85-store sporting-goods chain, used to pride itself on being an authentic outdoor retailer. The company was founded in 1967 by a gritty mountain man who was irritated that no one in the United States carried ice-climbing axes. But in recent years, EMS moved away from selling technical gear such as kayaks, rock-climbing shoes, and ski bindings to hard-core outdoor types, and began courting older, mainstream customers with such soft stuff as fleece jackets and cotton sweaters. By the time Manzer signed on as CEO in 2003, EMS was a blurry also-ran in the industry. "EMS had become a Gap with climbing ropes," says Manzer of the outfit he acquired through a management buyout in September.

Now Manzer vows to drag EMS out from its refuge behind the racks of khaki slacks. But taking the 1,650-employee company back to its authentic roots will be tough and risky. Manzer is questioning everything about its products, its image — and, most of all, its customers. It's a process that will radically reshape EMS around a younger customer base and an edgier product line. And as the chain seeks to recapture its authentic outdoor sports heritage, not all customers will be welcome. "We're inevitably going to alienate some of the soccer moms and dads," Manzer says. In the short run, that could mean some loss of revenue, and maybe some store closings and relocations. But Manzer says EMS has to bite the bullet if it is to survive and grow again. "EMS wasn't safe," he says. "It wasn't clear or differentiated. If we're not precise in our answer to the outdoor athlete, then we mean nothing to anybody. We have to become a brand. There's no other way out."

Brands mired in the middle have faced similar dilemmas for years, of course — think network TV, or Sears. But the continuing triumph of omnivorous big-box retailers such as Wal-Mart and Target has made the challenge particularly acute for specialty retailers such as EMS, says Larry Selden, a Columbia marketing professor and author of Angel Customers & Demon Customers (Portfolio, 2003). The specialists simply have to intensify their focus to stay alive, offering products and services that mass merchants cannot. And that often means leaving some customers behind. The wrong customers can cost retailers time and resources, often for little or no revenue. Good ones — passionate ones — are less work, drive more profits, and help shape the image of the brand. Last year, for example, Toys "R" Us let slip that it may leave the toy market altogether in order to focus on its more targeted Babies "R" Us properties. And Best Buy made headlines this winter when the CEO revealed he was abandoning the company's "devil" customers in the unprofitable middle — the sale- and rebate-chasing crowd — and retooling its 670 stores to cater to its high-end "angel" clientele.

At first glance, though, EMS's once and future core customer — called the "knuckle dragger" — hardly seems angelic. "The knuckle dragger is the guy or woman living out of their car, their mother's basement, or an apartment with 12 other people," says Ralph Lucarelli, EMS's director of visual marketing. "They eat, sleep, and breathe just to do their passion." But what gives them their halos, he says, is this: "Every last dollar they get is spent on new gear." Rodney Brewer of Worcester, Massachusetts, is just the kind of gearhead EMS lost and wants back. Brewer first walked into an EMS store when he was 12. Now 35, he's a devotee of mountaineering, kayaking, and mountain biking; he still uses stuff he bought at EMS 20 years ago. But he was alienated by the years when EMS played Connie Francis on the in-store speakers and advertised that it sold "the best gear and equipment . . . for cheering the kids on at soccer!" The store's message to customers like Brewer: "Don't shop here anymore; we don't carry gear," says veteran employee Tim Bradbury.

Enter Manzer. On paper, he was just what EMS didn't need: a retailer with a background in mainstream apparel. But Manzer is the real deal. The boots, jeans, and flannel shirts he wears around EMS offer no hint of the years he spent as the president of Perry Ellis Menswear. A 12-year veteran of the competitive triathlete circuit, he's the first EMS CEO since the company's founder to walk the walk. In his case, on a pair of titanium hips.

It took some gumption, though, for Manzer to argue that EMS needed a radical makeover, because those racks of fleece were selling. "In the three years prior to Will's buyout, profitability in apparel was climbing," says Pete Gilmore, a vice president formerly in charge of soft goods. But Manzer says the handwriting was on the wall. While profits in apparel were climbing, overall revenue at the $200 million company was declining.

Rebuilding the EMS brand started with the products. The company is reconnecting with its hard-core audience by leaping into edgy new sports well before others — kite skiing, for example, and high-performance sledding. Beyond a small circle of knuckle draggers with a death wish, will aircraft-grade aluminum toboggans and such sell? That's not the point, says Gilmore. It's about becoming the place for gear again. "They're fringe sports, but they're also alpha sports," he says. "We're not going to sell a ton of these, but when someone wants one, we've got them." EMS is also designing such things as the Digidome, a tent with integrated solar panels, speakers, and a power jack (for those who need to charge their laptops from the great outdoors). Such rivals as Cabela's and REI — not to mention the Gap — won't. "They're picking segments and subsegments where they think they can massively win," says Selden.

To make the environment match the products, EMS is redesigning its stores to project an image of danger, fun, and adrenaline. The prototype store, under Bradbury's direction in Millbury, Massachusetts, is raw and utilitarian, like an airplane hangar stocked full of snowshoes and freeze-dried camping food. Large plasma screens over the cash register flash dizzying scenes of kite skiers soaring off cliffs. Steel racks with exposed welding, machine-shop shelves, and stacks of fluorescent orange buckets fill the walls. It's a design the company hopes will actually put older customers on edge. "This store is probably too raw for people over 40," says Lucarelli, who was in charge of making the concept store a reality. "We may have fewer customers, but they'll be the right customers." Like Brewer, the onetime EMS fan. He's been to the prototype store, and he likes the look of it. "It's a direction they really should go in," he says. "The majority of their core customers over the years have been waiting for this."

EMS is also hiring its core knuckle-dragger customers to staff the stores. "Which is easier," asks Bradbury, "teaching kids who can fold sweaters how to ice climb, or teaching ice climbers how to fold sweaters?" Those gearhead salespeople aren't just knowledgeable about their stores' products; their contacts in local communities of outdoor enthusiasts reach much deeper than any marketing campaign. At the Millbury store, for example, one employee runs the Web site for the New England rock-climbing club. To attract such knowledgeable employees and keep them happy, EMS offers flexible work plans with sabbatical-like stretches of vacation time. Several years ago, Bradbury took a year off from EMS to go climbing in the Himalayas. Recently, his assistant manager spent a month rock climbing in Thailand. Such liberties aren't just for management-track employees: After a year, any full-timer can cut out for 90 days' unpaid leave. It's just another part of Manzer's plan to get EMS back on the side of the angels.

Lucas Conley is a Fast Company staff writer.

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