Lost Arrow Corp., the parent company of outdoor-industry mainstay Patagonia, has moved further into the snowboarding world with its 50-percent acquisition of women’s snowboard-apparel brand Cold As Ice.
Financial details about the deal were not released by either of the privately held companies.
According to Cold As Ice CEO Darcy Lee, the acquisition is an opportunity, not a necessity. "We didn’t have to do the deal, so we were able to be really up front about what we wanted," she says, noting that her company’s financial stability was one of the reasons Lost Arrow approached them.
"I think we offer them three things," says Lee. "First, this is a really healthy company where they could walk in and be part of the growth. Second, we offer new energy and a different perspective on the entire market. Patagonia’s products are technical, technical, technical, and then visual. Our focus is technical and visual together, and then price. After all, their prices start where ours end. Plus, out of necessity, everything we do is really fine-tuned and without waste. We run a lean company, and I think they’re trying to reexamine that at Patagonia.
"Third, we both have larger goals that go out into the community. Patagonia’s big thing is helping the environment. Our is with women’s issues. Both ultimately relate to our business and both add a lot of passion and excitement to the brands."
Lee says that she had been talking to Patagonia Founder Yvon Chouinard and New Business Development Vice President Bill Kulczycki for a number of months before inking the deal. So why did Lost Arrow only purchase 50 percent of the company? "We had three or four different structures on the table," says Lee, "but one of my requirements was they needed to figure out a way to keep me very interested in the company."
Lee says that on a product basis, little will change with the brand. "We’ll still use our own manufacturing and we’ll still be an independently run company in Costa Mesa California," she says. "Really, things aren’t going to change a whole lot."
However, the deal has allowed Lee to hire some new employees, including new Sales Manager Kim Taylor who previously worked at Smith, The North Face, and Patagonia. Lee is also looking to hire a new marketing director for the brand.
Cold as Ice will utilize Patagonia’s centralized warehouse near Reno, Nevada, and there will be a greater emphasis on marketing.
"We’ve always had a great relationship with our bank," says Lee. "Part of that is because one of my pet peeves is not paying bills on time. We haven’t gone crazy marketing Cold As Ice–a lot of brands did. That contributed to the fact that we’re still around and doing well. But we are in the process of budgeting for next year, and Lost Arrow is planning to pour some money into that marketing side of things. That makes sense now."
But Lee says she remains realistic about growth. "Lost Arrow understands our niche and is here to help. They want us to continue to do what we’re doing–they certainly didn’t come in with their own vision of what the brand should be.
"You plan for serious growth," continues Lee, "but growth depends on eight-million ingredients."
She does admit, however, that retailers and consumers will probably take Cold As Ice a little more seriously now that it has Lost Arrow backing it. "Our only worry–if we have one–is that people outside the company will now think we have these tremendously deep pockets," she says. "This deal is definitely not a blank check."
And what does she think about teaming up with Chouinard, one of the legends of the industry? "When someone like that takes an interest in your business, you’re obviously thrilled," she says. "I would have sold my company for half the amount to be involved with them."
"Well, not really," she laughs.