If you know action sports at all, you know SPY Optics. A Southern California stalwart for 23 years, the eyewear brand has become synonymous with the laid-back lifestyle that embodies our industry.
With a turbulent retail landscape taking a toll on many well-known (and lesser-established) brands in our world, SPY was one of many that struggled for a few years to retain and overcome challenges that have affected us all.
The good news at the end of this story? They’ve done it. Not only has SPY returned to profitability, they’ve done it with a renewed vigor and enthusiasm. According to the eyewear experts, 2017 is their year.
Vice President of Sales Charlie Ninegar sat down with Transworld Business to walk us through SPY’s journey to profitability, and what 2017 and beyond holds for the heritage brand.
Interview has been edited for length and clarity.
This is SPY's first profitable net income year in some time. Explain to us what that means for the company, symbolically and in terms of real effects on productivity.
Being profitable for the first time in over a decade was a very important goal for us to achieve in 2016. To us, this literally, not just symbolically, means we have prepared well for the world that faces us. Despite the turbulence and dynamic nature of the current eyewear market, we have become a viable, productive and profitable business. It also means we are positioned to make investments when we see the right opportunity, which makes us offensive and not defensive as an organization, and we think that's a great place to be.
What has SPY changed since 2015 in order to make their comeback?
We have certainly undergone some cultural changes internally. First and foremost, our owner and CEO Seth Hamot has brought his very strong financial background to the business. He's helped us eliminate distractions and focus our resources where they are most productive. We are testing and analyzing everything to better understand what draws people to SPY and eyewear in general. But most of all, we have truly brought a heightened sense of focus to the company.
Hamot has been CEO for almost 2 years now. What were his top initiatives on his list when coming on board? Has he seen those goals come to fruition, and can you breakdown what that strategy looked like?
Seth's goals were to structure this company for success in the present and future. That meant finding a resolution to the major debt we were carrying and scaling the company and its expenses to the appropriate size, which we did. Then we put investments where they made long term sense, in personnel, facilities and the channels that were prepared to grow. Finally, he wanted us to be profitable so we would be positioned to invest further going forward.
How have you lowered operating costs, as well as increased sales? What steps have you taken?
It's very important for me to make clear we didn't get there by simply cutting costs. We made massive investments in 2015 and 2016. We also invested in a large-scale market research project that has given us tons of insight into consumer habits and how our products and brand are experienced in the market. And finally, we have set aside a healthy chunk of our budget to provide continued employee training, so that every SPY employee has an opportunity become better while they work at SPY.
At the same time, we have made decisions that have cost us immediate sales in the interest of long term brand health. I am very proud of the fact that we have put a massive effort into marketplace cleanup, and in 2016 shut down every known account that was selling our products where they weren't permitted and for prices that were not MAP compliant. We have invested further in many tools to help us clean up online marketplaces, and while there is still work to be done, we are light years ahead of where we were this time last year.
You're in a new office space. Has a change of scenery helped usher in a new era for SPY?
Leaving a 17-year-old office with an equally antiquated warehouse attached to it and moving into a new, bigger building and then building a state of the art warehouse inside of it was certainly a symbolic event for SPY. We have adopted an open office architecture where the CEO and other executives can be found sitting in the middle of the customer service call center every day, myself included. That shows you where our heads are at. It also tells you how we are connected to the daily business in a very real way.
We are still settling into the new digs, and have hopes to continue to build out the office into an energetic and creative place to work, filled with the brightest minds in our industry.
What's next for SPY this year? Any news you can share?
Plenty. First and foremost, continued financial discipline and business focus. From there, we have quite a few things….
- New Athletes: We've honed our athlete roster in every sport, and have some exciting new partners. Most notably, we've added both Mason and Coco Ho on the surf side, as well as Eric Jackson on the snow side in the last few months.
- New Website: We are launching a brand-new website, which is our best touchpoint for education on our brand and products, and it simply wasn't current.
- New Marketing Campaign: Launches late spring. Stay tuned.
- New point-of-purchase strategies: Which have improved sell through in tests last fall will be launched more broadly. Also, continuing to share our research with our retail partners so they can sell more eyewear, SPY or other.
- Happy RX: Further educating our consumers and customers on our Happy Lens technology and the important benefits of longwave blue light.
At the end of the day, SPY is facing all the same challenges our friends at retail and other brands are facing. There isn't much that's going to come easy for a while. But we've done a lot of work to prepare for this moment and we are better suited than ever before to get through it and even find ways to grow around the challenges, as we've been doing for over a year.