Interesting Bloomberg article re: Private equity in flyfishing/Simms

Is this profitable? If so, how?

Diminishing the brand reputation among customers and losing retail shops carrying their product, seems like a way to LOSE money, not make money.
Dear troutbert,

PE firms don't always expect to make money on every acquisition. Oft times they are content with buying a relatively cash flush company and milking it for every cent it is worth and then selling it off for whatever they get while claiming a loss on their balance sheet. It helps offset when they make huge gains with another acquisition.

I speak from experience. The company I work for was purchased by a PE company about 15 years ago. They curtailed investment and made it difficult to maintain our assets and maintain our level of service. When they finally sold, they essentially doubled their initial investment without counting the money they pilfered over time. Ironically, they took the 2X value after turning down an offer that would have paid 3X their original investment. The new buyer came in full of promises but now, we are closing in 2 months. The lack of investment by the PE firm made it impossible to continue operating without spending huge amounts of money.

Regards,

Tim Murphy 🙂
 
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I started pivoting away from Simms on my last wader and vest purchase.

Simms will exist in some form, no doubt. Likely continue a downhill slide until some industry insiders buy the shell of its former self with a plan to regain its past glory.

Not sure it has the power to cross over into mainstream wear and sounds like its traditional base will drop it like a slippery fish.
 
Is this profitable? If so, how?

Diminishing the brand reputation among customers and losing retail shops carrying their product, seems like a way to LOSE money, not make money.
There’s a good chance that ownership of similar brands WANT a downward QC profit loss as a tax shelter for something bigger and non related to fly fishing - Elon uses Tesla to push Space-X in this manner in order to secure government contracts - to wit: the “parent” companies don’t care if it works - just move as much product as possible at the right time - when quality is unsustainable, dump the brand to another buyer - 3M Scientific Anglers did that exact move when it sold out to Orvis - sad but true - SO many companies count on silly brand loyalty from the end user it’ll make your head spin - guitars, fishing equipment, and much of the nasty food we eat are “same stuff from the same factory/plant with different brand stickers on them.
 
THe saying was "creative destruction" and has gone to, admittedly by a Tech Bro as "Now it's more like destructive destruction". So much of the scheme of private equity, what used to be called corporate raiders, was to extract wealth from the value of an entity and leave a dessicated corpse. Or as a Neo-Marxist like me calls end-stage capitalism. It's continues to be so obvious to me that our over-masters don't refute arguements about their finanacial schemes, dealings and established practices, they are just never mentioned. There is only the weakest voice of "maybe this is bad" while the message IT MAKES US FKKN MONEY is the sound that gets reinforced. What happens when Capitalism turns on itself and consumes the benefits of capitalist enterprises? Well, look around you and see!
 
That all checks out, but the thing is that you don't sell out to PE if you're thriving. Orvis doesn't close their stores, lay off half their workers, kill soft goods, and eliminate their in-person main offices if they're thriving. Far Bank doesn't cut half their product line if they're thriving.

The industry as a whole seems to have a major problem, and I'm willing to bet it has something to do with $1k fishing poles and $600 rubber pants.
Yeah they do. They just choose to get sold. THat's it.
 
Yeah they do. They just choose to get sold. THat's it.
Dear Syl,

That reminds me of the song about Billy Mack the detective down in Texas. Take the money and run is the real motto. Same as it ever was, same as it ever was. 😉

Regards,

Tim Murphy 🙂
 
It sounds like you don't really know the history of SA.
Kev,
Sounds like you took my point of fact the wrong way - I got to participate in the glory days of the 3M iteration of S.A. - sold hundreds of Air Cel Supreme, Ultra, Ultra 2 and later Ultra 3 lines along with the whole Mastery program series of lines/leaders/tippets. I spooled dozens of Japanese (Daiwa) built System 1 reels along with dozens of JW Young built System 2, 2L, and 2LC reels with S.A. 20# Dacron and (usually) newly purchased S.A. fly line. The shop I managed was one of the first Mastery Approved dealers in PA because I drew up a mandatory (for dealership) lesson plan and taught the course too. I lived that part of S.A. history and was not disappointed when they “sold out” to Orvis - my point was that they were part of the stationary department at 3M and 3M took it as far as they wanted - then sold the brand to Orvis while staying somewhat autonomous - Orvis has the brand recognition to sell $100 fly lines and (I think) 3M was happier to divert R+D dollars back into post-it notes.
 

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Dear Syl,

That reminds me of the song about Billy Mack the detective down in Texas. Take the money and run is the real motto. Same as it ever was, same as it ever was. 😉

Regards,

Tim Murphy 🙂
“🎶Hoo Hoo Hoo!🎶”
 
Private equity is ruining EVERY business I've dealt with that has been taken over. It is becoming especially prevalent in large service industries where now EBITDA is more important than good old fashioned customer service..

It has got so bad that recently when I had to chose a new HVAC & water softening company for my home, AFTER the usual vetting and review reading, I made sure they were privately owned before I called to schedule service.
 
Private equity is ruining EVERY business I've dealt with that has been taken over. It is becoming especially prevalent in large service industries where now EBITDA is more important than good old fashioned customer service..

It has got so bad that recently when I had to chose a new HVAC & water softening company for my home, AFTER the usual vetting and review reading, I made sure they were privately owned before I called to schedule service.
Dear Bamboozle,

Please don't ever let me get started on the 3rd party takeover of veterinarian services. For 20 years I dealt with what was widely considered the worst veterinarian service in the Harrisburg area and never once had anything to complain about. They always treated both myself, and every dog I took to them with kindness and respect in both good times and bad.

They got bought out a couple of years ago by another service in Harrisburg who was also bought out by a "corporation." Now it's all about prescription this or that, and health plans that cost as much for a month as I've ever spent on acquiring a dog.

I need to find a country vet that just does what needs to be done without inflicting guilt trips on pet owners. I don't care if me and the dog have to stand behind a goat and steer and monkey when we visit.

OK, I guess I got started. I promise I'll stop now and let things return to talking about fly fishing companies that sold out.

Regards,

Tim Murphy 🙂
 
Skwala is a newer player that has cut into that market share. Patagonia, Orvis, Grundens.

Edit: I just checked TCO's site. They are still selling Simms but looks like they have it all on sale so maybe not for long.
Precision State College (FFP) carries Skwala. Definitely going to look hard after my G3s crap the bed (probably in. 3 years).
My older G3s got repaired last spring. The customer service was good (still). Repair tech called me with an update and information and when we got disconnected he called back . But, I see the writing on the wall.
 
Kev,
I lived that part of S.A. history and was not disappointed when they “sold out” to Orvis

Sorry, it was difficult to ascertain from your post. I guess "sad but true" was misleading.

I do agree that the sale of SA to Orvis was not a bad move, considering it occurred roughly around the same time when Farbank and others were buying up fishing brands. It could have been far worse.

For those that don't know, SA was a part of a pet project for 3M. Newer anglers would probably be surprised to see reference to not only SA lines, but rods and reels in older magazines and books.
 
Precision State College (FFP) carries Skwala. Definitely going to look hard after my G3s crap the bed (probably in. 3 years).
My older G3s got repaired last spring. The customer service was good (still). Repair tech called me with an update and information and when we got disconnected he called back . But, I see the writing on the wall.
I have a pair of Skwala waders and like them very much. I would also suggest putting Grunden on the list, also.
 
Sorry, it was difficult to ascertain from your post. I guess "sad but true" was misleading.

I do agree that the sale of SA to Orvis was not a bad move, considering it occurred roughly around the same time when Farbank and others were buying up fishing brands. It could have been far worse.

For those that don't know, SA was a part of a pet project for 3M. Newer anglers would probably be surprised to see reference to not only SA lines, but rods and reels in older magazines and books.
The sad but true quote is aimed at the natural progression of these “iconic” brands trying to sell all of us the next best thing - I still have several Mastery Lines from those days and they perform well enough even 35 years later - to be fair, I don’t fish them very much but they’ve held up well with minimal maintenance
 
I’ve been a loyal Simms customer ever since I bought my first pair of their neoprene waders sometime in the early 1980’s, and I believe they were much better than several other waders that I had owned before them. I personally took a pair or 2 of those waders back for repairs to Jackson Hole, WY where they were located a time or 2 when I was in the area, and I remember that their building there reminded me of an oversized garage. They offered custom wader sizes, which I had purchased, and their service was top notch.

In 1993, Simms was purchased by K.C. Walsh, who I understood was also a fly fisherman, and he moved their headquarters to Bozeman, just north of Interstate 90. I also stopped there several times for wader repairs, etc. and bought a pair of their first GoreTex waders which Simms was the first company to produce, I believe in the mid-1990’s. Again, I always felt their service was excellent, and while their original wader design wasn’t particularly good, it improved in subsequent years.

Beginning in 2001, my wife and I began spending our summers near Livingston, MT and frequently went to Bozeman, and I always looked at the Simms building whenever we drove by it on the highway. I remember seeing it expand in size there a time or 2, and they also expanded their product offerings during that time as well, to wading boots (a natural compliment to their waders) and to clothing, and other products as well.

At least a part of their waders (and perhaps other products) were made by persons working from their homes in the Bozeman area, and I remember seeing help wanted ads in the local newspaper from time to time. A friend of mine and I both bought one of their earlier Simms-branded collapsible wading staffs, which we both had to return for defects. I can’t remember the issues we had, but they handled it by promptly giving each of us a new wading staff.

Sometime around 2015 Simms again moved their headquarters about 10 miles southwest of Bozeman to Four Corners and expanded their building size once more. The Bozeman newspaper reported they operated out of a 66,000 sq ft multistory building, larger than the one in Bozeman. Business appeared to be increasing, but I remember their wader repair service time increased somewhat as well.

(As an aside, during the years that my wife and I spent our summers in Montana we were 18 miles south of Livingston, and 50 miles away from Simms in Four Corners. One summer, i think in 2116, a young fellow who was a manager of distribution at Simms, and his wife, built a Yurt to live in on top of the hillside across the road from us. My best friend and I regularly walked 3 miles most mornings on a dirt road up that hill where they had built their Yurt and that guy often passed us driving his Subaru down the road on his way to work. Their nearest neighbors at the time were about 1 mile from them, nearer to the main road. I would have been concerned about living in that tent in the winter cold and wind, as well as the blazing sun in the summer. I talked to the woman a short time after they had moved in and she said her main concern was rattlesnakes getting under their Yurt. I understand they made it through that first winter but they had moved away before we returned the next summer.)

I don’t fault anyone for the changes that are occurring in Simms, no more than those that are, or have taken place in other companies. I have enjoyed the wader innovations and improvements that Siimms have made over the past 40+ years, and will continue to use the Simms products that I presently own as long as they, and I, hold up. I have always bought what I considered the best quality products available in the market, at the lowest prices I could find, consistent with what I could afford, and intend to do so in the future. I believe in free markets, and freedom of choice, and even though that freedom results in some errors being made in the short run, I believe that we are ultimately better off in the long run.
 
Most people aren't as fine tuned with whats actually going on behind the scenes as the people posting on this fourm. Eventually you will see cheaply made budget gear with the Simms name on it at places like Walmart, Sportsmans Warehouse, and Dunham's. The masses will see the name Simms and recognize it as a quality product, but what they are buying is mass produced junk with the Simms name stamped on it. The company will bleed every cent they can out of the name while at the same time using the Simms company as collateral to take loans to buy up other businesses. Eventually they will sell whats left as part of some tax scam that is too complicated for us laymen to understand so another PE company can rinse and repeat, or declare bankruptcy.

See: Craftsman, Gerber (the knife company not baby food), Woolrich, Hoover and Oreck, Doc Martins, Starrett tools.......on and on and on.
100%. The name is often the only thing private equity sees as valuable. I’ve lived through a PE acquisition and watched a genuinely great company get stripped down and ruined. It’s hard not to see PE as doing more harm than good.
 
100%. The name is often the only thing private equity sees as valuable. I’ve lived through a PE acquisition and watched a genuinely great company get stripped down and ruined. It’s hard not to see PE as doing more harm than good.
Back in my retail days, we called it “whoring it out” when a boutique brand went to Bass Pro or other “big box” store - especially when the sales reps promised it would never happen - companies that did that to our shop (after doing many 100’s of thousands of $ in business with them) included Sage, Woolrich, Remington, Rocky boots, Browning, 10X, Diawa, Shimano, Leupold, Burris, Scientific Anglers, Berkeley, and a few more - Companies that staid with the small dealer for at least a little while longer included Cortland, Weatherby, Winchester, Columbia, Mustad and a few more - ironic that the “big box” stores have suffered the same fate thanks to Amazon and Temu
 
I have zero brand loyalties and could not care any less about what Simms or any other company does. As long as I maintain control over who gets my money for what, I don’t really care how companies decide to run their business. If Simms cut into a local fly shops profit margin then the local shop can opt to sell something other than Simms gear. That’s business. Sounds to me like the local shop wanted to gouge customers on the price of waders and got mad when Simms included price controls. Companies rise and fall all the time so there will always be another Simms to fill the needs of anglers, as we already see. The thought that Simms sold out by selling in big box stores makes no sense. They didn’t sell out they just want to sell their wares in the places where the majority of people shop.

Private equity is not a four letter word. I like investing in private equities more than I like Simms and everybody's portfolios should contain some PE investments.
 
I have zero brand loyalties and could not care any less about what Simms or any other company does. As long as I maintain control over who gets my money for what, I don’t really care how companies decide to run their business. If Simms cut into a local fly shops profit margin then the local shop can opt to sell something other than Simms gear. That’s business. Sounds to me like the local shop wanted to gouge customers on the price of waders and got mad when Simms included price controls. Companies rise and fall all the time so there will always be another Simms to fill the needs of anglers, as we already see. The thought that Simms sold out by selling in big box stores makes no sense. They didn’t sell out they just want to sell their wares in the places where the majority of people shop.

Private equity is not a four letter word. I like investing in private equities more than I like Simms and everybody's portfolios should contain some PE investments.
Unfortunately, in many industries consumers are also losing control over where their money ultimately goes. A good example is homeowner lawn equipment—roughly 80% (and likely soon closer to 90%) is produced by MTD Holdings, which has significantly reduced real choice and quality. We’ve seen similar patterns elsewhere; for instance, Simms waders were once exceptional, but today they feel far more run-of-the-mill than they used to.

When private equity consolidates markets, competition shrinks, and over time quality almost always follows. That’s where a lot of the concern comes from—not ideology, but lived experience as both consumers and employees.

BUT, I to feed the beast
 
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