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Industry Insight

MOSS ADAMS CAPITAL: Apparel and foowear market monitor highlights notable deals, stock prices and results.

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Tiffany Montgomery
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Armada's action sports ethos

By Tiffany Montgomery
April 15, 2010 6:00 AM

I recently found out more about Armada, a ski company that intrigued me for a few reasons. While it targets the ski market, the marketing and design vibe of the Armada is very similar to action sports brands.

And, the company is headquartered in Costa Mesa, not exactly the snow hardgoods capital of the world.

I happened to meet Armada President Hans Smith at SIA and discovered he is a loyal Shop-eat-surf reader, which I must confess is always a thrill.

Hans gave me an update on what’s new with Armada and where it wants to go.


Armada boothThe idea for the company came from five skiers who were fed up with how skiing was being marketed and saw all the kids were more interested in snowboarding, which was seen as much cooler, Originally, Armada started as a free ski company, but now makes all kinds of skis for everything from park riding to powder riding. Its target market is 12-to 24-year old males.

(Above: The busy Armada booth at SIA.)

The five pro skiers and a wealthy family in London that are avid skiers owns the company.

Hans, who came from Oakley, where he helped develop and launch Oakley’s e-commerce platform, is also a co-founder and shareholder, as is Chris O’Connell, the head of marketing.

Vibe vs. cost

Operating a ski company from Southern California is not the norm, but Armada wanted to be near surf and skate culture for inspiration and to source good artists and designers.

The trade-off is high living expenses vs. access to a large talent pool, Hans said. And other cities have tried to recruit Armada with the lure of lower expenses, including Ogden, Utah, he said.

Armada started in 2002 with two models of skis. Originally, the company made its skis in a snowboard factory in Canada but the skis fell apart.

“We learned it doesn’t matter how well something is marketed if the product is bad,” Hans said.

Armada now makes its skis in Austria, and produces 23 different models. The company also sells fleece, Ts, beanies and technical outerwear. Hans declined to provide annual revenue figures.

Armada is mainly sold in specialty ski stores, Hans said, and uses Shopatron online. Its highest volume account in Southern California is Get Boards in Big Bear.

As far as larger chains, the company sells in Sports Chalet, and has chosen not to distribute in Dick’s and Sports Authority at this time.

Ramping up outerwear

Armada outerwearArmada’s outerwear category is growing rapidly with prebooks up 105% for next season, Hans said.

The company is looking to grow outerwear to balance its more risky hardgoods business. Outerwear has higher margins than hardgoods and is not subject to the same currency fluctuations because the company pays the apparel factories in dollars.

Thanks to the recession, Armada was able to secure agreements with better factories for outerwear, which previously demanded higher minimums.

Recession challenges

The biggest challenge during the recession was getting paid, Hans said. While Armada runs a lean operation – it has 10 employees in Costa Mesa and two in Zurich - the downturn forced the company to have better controls and manage receivables and cash flow better.

Europe is Armada’s biggest market, and it uses 25 different distributors. Originally, it planned to operate directly there but demand increased beyond the company’s logistic capabilities. Armada handles major marketing initiatives in Europe.

The future

I asked Hans what is the end game for Armada.

“We don’t have an exit strategy,” Hans said. “We think one will present itself if we do things right and create a lot more brand equity.”


More on: SIA, snow, Armada

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