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Black Diamond: leaving California for the mountains of Utah.

Black Diamond Leaving California for the Mountains of Utah

Who is Black Diamond? This question was posed in an advertisement in Climbing magazine in January of 1990.

Last winter, when Black Diamond announced it was moving to Utah, local residents were asking the same question.

The answer in the magazine ad was simple and direct. "The employees of Chouinard Equipment are proud to announce that they have bought the assets of Chouinard Equipment, Ltd., which has acquired the Chouinard trademark as well as Chouinard's existing inventory, designs, and machine shop."

The advertisement/ announcement came at the end of seven months of trying negotiations between the partner company of Chouinard Equipment and a corporation (later to become Black Diamond) formed by Chouinard employees. The buy out was headed up by Peter Metcalf, who, as Chouinard's general manager, had been the primary person responsible for catapulting the company into mountaineering fame.

The Chouinard Roots

Metcalf joined the company in 1982 as the marketing manager. In this position he was responsible for overseeing sales, marketing, design, customer service, production, and warehouse operations. With only six employees working for Chouinard Equipment, Metcalf had a big job looming ahead of him.

Yet under Metcalf's leadership, the company's sales began to flourish, and one year later he was promoted to general manager. In the seven years that followed, sales at Chouinard Equipment grew from $1.1 million to $7.2 million, and the company once again became the leading manufacturer of climbing hardware in North America.

Metcalf's idea to expand the company's product line was a key component in the success. "We focused on segmented markets and tried to appeal to a broader group of these markets," Metcalf reveals. "We also rejuvenated the existing line and broadened it to include a mountaineering tent and climbing pants. And we moved into the back-country ski market, beginning with the three-pin binding, which soon became a raging success."

Perhaps more importantly, the company has never been just bottom-line oriented. "We've never been in business to be businessmen and to make a buck," he says. "Our commitment is to the sports we serve."

But in the mid-1980s things started to turn sour. Several lawsuits were brought against Chouinard Equipment, and insurance premiums were doubling annually. The lawsuits weren't due to product failure, but claimed a "failure to warn" on the products sold. Although the company did have warnings on their products, they were outdated and therefore no longer relevant.

So on April 17, 1989, with mounting liabilities, Yvon Chouinard declared Chouinard Equipment in Chapter 11 bankruptcy, thus protecting his assets with Patagonia, the sportswear company.

The Birth of Black Diamond

It was then that Metcalf decided to lead the company's employees in a buy out. So Chouinard's employees invested their retirement monies in stock to purchase Chouinard Equipment's assets, while Metcalf and other employees invested their savings. Then Metcalf set off to raise additional funds via subdebts and equity. The final price tag for the company was between $2.5 to $3.25 million.

Seven months following the declaration of bankruptcy, on November 30, 1989, Chouinard Equipment ceased to exist and Black Diamond emerged. With ownership of the new company, Black Diamond's employees were in for a challenging uphill climb. The change in the company's name alone was expected to adversely affect Black Diamond's sales. But much to the new owner's surprise, just the opposite happened. "Dealers said to give it up if we lost the Chouinard name," Metcalf remembers, "but we interpreted a marketing survey to mean something different." The marketing survey revealed that it wasn't the name, Chouinard, that customers were buying, but the functional, quality equipment.

"Our marketing has always been |pull' marketing," Metcalf explains. "Which means people ask for it in the stores and there's demand for it. We don't |push' it on the retailers."

To prevent future disabling liability cases, Black Diamond has continued developing aircraft-quality specifications and product testing that Chouinard had started late in the company's life. "We have created detailed blueprints that must be signed off by almost every department," Metcalf says. "And we require rigorous testing." The result is a better product and, in the event of a lawsuit, stronger documentation.

In addition, warnings on products are reviewed by Black Diamond's attorneys, and the company has an insurance firm that Metcalf says understands risk as well as Black Diamond's markets.

The Move to Utah

Understanding mountaineering is important in a company like Black Diamond. Though Black Diamond doesn't require its employees to climb or ski the backcountry, if they do it's all the better. "I feel that participants in the sport will appreciate their jobs better if they are using the gear and if their friends are using the gear," Metcalf says. "It creates an extra source of pride in areas like customer service, sales and research, and development. Also, people involved with these sports usually share certain ideals and standards that help to create a cohesive company."

This past summer Black Diamond was based in Ventura, Calif., where the company leased office space with Patagonia. Looking out Metcalf's office window last spring, one could see a soccer field and basketball courts, full of Black Diamond and Patagonia employees enjoying their lunch break. But this fall the view changed from the lemon orchards of California to the foothills surrounding Salt Lake City. The company complex is located at 2084 E. 3900 S. in Salt Lake City.

According to Metcalf, the decision to move to Utah was four-fold, "Salt Lake City is centrally located in the West and has easy access to an international airport," he says. "The cost of living is less expensive than California, and the labor pool has a good work ethic."

But perhaps even more important is that the surrounding mountains offer the opportunity for the "company sports" such as rock climbing, ice climbing, and skiing.

The new Black Diamond facility, located in the former Engh Village, houses the company's administrative offices and a climbing hardware manufacturing facility and warehouse. Less than half of Black Diamond's 75 employees have chosen to move with the company; the rest have been hired locally and from throughout the United States. Hopefully, Black Diamond will find just the inspiration it needs for its products from its new location in the mountains of Utah.

PHOTO : These hooks keep ropes secure and mountain climbers safe.
COPYRIGHT 1991 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:sporting goods equipment company
Author:Volmer, Nancy
Publication:Utah Business
Date:Nov 1, 1991
Words:1061
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