Columbia Sportswear (1938), company review

This one shocked me. When I see Columbia now - and it’s everywhere - I think of another outdoors brand that has morphed into the mainstream. And it has. Yawn, right? Wrong. The history of this outdoors company is enthralling. From its origins in Nazi Germany, to Ma Boyle’s ‘mad’ ads which were ahead of their time. Our 2024 marketing friends could learn a thing or two about grabbing attention! And, as I research differing insulation options for CRUA, I see clearly what an important place Columbia has had in the R&D of insulation in apparel.

Let’s start in pre-war Nazi Germany. That’s something I’ve not said very often. Paul Lamfrom, the founder of Columbia, was born in Germany in 1888 into a family engaged in the shirt-making industry. Concerned for the safety and future of his family as a result of rising anti-Semitism, he and his wife Marie made the decision to relocate to Portland, Oregon in 1937. A year after their arrival in the US, Paul bought a retailer called ‘The Rosenfeld Hat Company’ using money he borrowed from his cousin. Lamfrom chose to rename the business to The Columbia Hat Company, inspired by the Columbia River that runs through Portland.

Lamfrom led the company until he passed away in 1964. After that, Neal Boyle, who married Lamfrom’s daughter Gert in 1960, stepped in to run the company. By then, Columbia had branched out from just hats and was also offering hiking and fishing apparel.

Tragically, Boyle suffered a heart attack and died unexpectedly in 1970. This left Gert to deal with the aftermath. Columbia was in serious debt, and their home, along with her mother’s, were at risk as collateral.

This next bit is key:

“After rejecting an offer for the company that would have left her with $1,400 — she said she’d rather run the company into the ground — Gert took on the business and got her son, Tim, to work with her. The pair struggled to run the company at first but ultimately managed to make things work.”

Again, that ‘hang-in-there-ability’ while making sound strategic decisions. I love these stories. We all know how difficult business is, and this trait is so important. But has to be backed by sound strategic decisions and action, rather than just hope. It’s also reported that Gert left the bidder in no uncertain terms about what she thought of him trying to ‘nickel-and-dime her at closing.’

For over ten years after the mother-son duo took charge, Columbia stabilized as a local company and brand, mainly loved by outdoor enthusiasts in the Pacific Northwest. But something changed in 1984 when a bunch of TV ads hit the airwaves. These now commercials turned Gert Boyle into the iconic ‘Ma Boyle’, a no-nonsense mom who ensured every Columbia product met high standards. One memorable ad showed her putting Ian Boyle through a car wash to prove their jackets were truly waterproof, while another featured her hanging out with a biker gang, flaunting a tattoo that read ‘born to nag’. These ads cleverly captured Gert Boyle’s real personality, and she was known for saying, “it’s perfect. Now make it better.”

Did it work? Well, hell ya. The ads were on air for two decades, and when they kicked off, Columbia was generating approx. $13 million in revenues annually - a great success in its own right. Fast forward ten years, and sales skyrocketed to $260 million. By the time the ads wrapped up in 2004, the clothing brand was pulling in a whopping $1.1 billion in revenue. It is of course important to recognize that this wasn’t just due to smart marketing.

Gert and Tim proved a sound business pair, and led Columbia astutely. For example Tim urged that the company shift production to Asia, and dive into the footwear market. His mother wasn't initially ‘over the moon’ with either idea but eventually agreed, and these moves ended up slashing costs and boosting revenue for the business. In 1975, they were the first company to introduce Gore-Tex parkas and also launched their very successful Bugaboo parka for skiers in 1986. Their Performance Fishing Gear, or PFG for short, was introduced in 1996. Both among their big hits. Gert Boyle was the president of the company from 1970 to 1988 and took on the role of chairman of the board in 1983. She held that position until she passed away in 2019. After her, Tim Boyle stepped in as Columbia's president and CEO in 1988 and was still in that role as of 2019 when he also became Chairman. There was one phase when in March 2015, Bryan Timm was named president of the company, taking over from Tim, who remained CEO. In May 2017 however it was announced Timm would step down and the duties of president would revert back to Tim Boyle, and he remains today. Forbes tells us he’s worth about $2 B, if you’re interested in that sort of thing. Continued after this short poll;

Columbia went public in 1998 but a lot of investors were pretty skeptical about it. The reason? Only 23 percent of the company’s common stock was actually issued and a big chunk of the money raised was set to go towards paying dividends to current shareholders — mainly the Boyle family and a few top execs.

Because of this, some analysts thought that Columbia going public was just Gert Boyle's way of cashing in for a comfy retirement. One even claimed that the ‘fashion’ brand would never pull in more than $300 million a year, which was a pretty dire estimate considering the company raked in nearly $430 million in its first year as a public entity.

To be fair, that skepticism had some merit. A significant portion of the IPO funds did end up going back to the Boyle family. But subsequent performance meant that shareholder doubt was short lived.

I mentioned earlier about the company’s innovation of insulation. Omni-Heat and Omni-Freeze launched in 2010 and 2013 respectively, both evolving since and receiving many accolades. I have a 6 year old Columbia jacket boasting Omni-Heat and it’s a great bit of kit. They haven’t been 6 easy years for it either, as it was put to the test many, many times! Believe it or not, in February 2024, the Odysseus lunar lander used the Omni-Heat thermal reflective insulation technology - produced by Columbia Sportswear… Enough said.

Columbia had been on the Acquisition trail for a significant period. They picked up Sorel, a footwear brand, in 2000 and then snagged Mountain Hardwear in 2003, a brand that was the pioneer of chemical free tents. A few years later, in 2006, they added the Pacific Trail and Montrail brands to their lineup, and in 2014, they brought Prana into the fold. So they have been busy.

Hence, as you would expect, there has been significant revenue growth again. According to Columbia Sportswear 's latest financial reports the company's current revenue (TTM) is $3.38 B. In 2023 the company made a revenue of $3.48 B an increase over the revenue in the year 2022 that were of $3.46 B. So a generally slightly tightening trend, which is very much in vogue within the industry. Its current market cap is $4.84 B.

What I find really interesting about the Columbia story is that they have moved to the mid tier, away from luxury, while taking advantage of the movement towards affordable athleisure. So again, appealing to more of the mass market rather than any sort of upper echelon. This is quite often a difficult thing to execute, so they have to be admired. Others have tried and fallen between two stools. No doubt, the stewardship of the Boyles has been a huge factor in this. And it’s a huge success story, which again shows that most very successful companies have gone through phases of uncertainty - at least. And those are the stories I love to hear. Triumph over adversity. Finding a way. Here’s to their next 86 years…

What we learnt from several investments in our website:

Nothing. Well, that’s unfair. But let me tell you this. If it doesn’t work on a very basic website, it will not work on an expensive and ‘fancy’ website. Despite what your Conversion Rate Optimization specialists will say. Do don’t expect a 0.01% conversion rate to become 2% with a website upgrade. From my experience, it won’t. Yes, there may be small improvements, but that’s it. Especially for considered purchases. It’s much more important to find the product market fit that enables pull, vs having to push all the time. It’s basic and as old as time itself, but absolutely crucial. Of course the website asset etc. quality needs to be high, but that can be done without spending a fortune.

Fact: Did you know that the average conversion rate on Amazon is 10% (Jungle Scout), while your average eCommerce D2C site conversion is around 2%? It’s only one data point, but a crucial one. We’ll delve in further in future chapters when we’ll examine the role of marketplaces for outdoors brands in 2025 and beyond..