As most of you read yesterday, ATK formally split off its sporting products under the corporate name Vista Outdoor. The company now comprises some 30 brands and is the largest single competitor in the outdoor industry.
Shooting Sports Retailer had the chance to sit down with CEO Mark DeYoung to get a better idea of where he wants to take the company and what it all means for retailers in the market.
Be sure to catch some of DeYoung’s extended comments at Grand View Outdoors and read more of the Q&A in the March issue of Shooting Sports Retailer.
SSR: The Utah Governor’s Office of Economic Development board offered Vista Outdoor a tax credit of up to $1.35 million over 7 years to move to the state. Where will the new facilities be located? Why did you select Utah as your worldwide headquarters?
MDY: We chose Utah because recreational development has been a big focus for the state for decades, and this fits our company philosophy and melds with our branded entities in the outdoor recreation, ammunition, shooting and hunting businesses. For example, all the facilities built for the 2002 Winter Olympics are still in operation here, the Outdoor Retailer show is held every year here, as is the Western Hunting and Conservation Expo. Plus it’s a great place for our employees to live and raise their families.
SSR: How about moving manufacturing overseas? Each brand is an entity unto itself, but how much of Vista Outdoors manufacturing will occur overseas?
MDY: Currently 17 percent of Vista revenue is generated internationally. For example, our eyewear lines Bolle, Cebe, and Serengeti are in France. But, generally speaking, we are an American company.
SSR: With Federal Premium, Savage, and Stevens, the old ATK was seen by many as a company that primarily served the firearms, shooting and gun hunting communities. Of course, you also have several brands that also cater to archers and bowhunters. Do you perceive this as a problem for Vista Outdoors going forward?
MDY: In truth, firearms sales account for less than 10 percent of Vista’s revenue. Of course ammunition is huge for us, it makes up somewhere between 45-50 percent of our revenue. But we also have brands like Primos with its blinds, scent-eliminating products, and calls, Gold Tip arrows, Bushnell optics and laser rangefinders, Bee Stinger bow stabilizers, and more — all that have a strong presence in the archery and bowhunting markets. The key for us is to let these brands operate in their own spaces, leverage their brands and stand alone, with Vista as the parent company that can help with its scale, distribution, and financial strength.
One key for us here is the fact that, while Vista is the largest company in the individual outdoor recreation business, we only have a total of $2.5 billion is sales out of an industry that generates annual sales of about $63 billion. Folks who hunt in fall and winter also fish and play outdoor sports in summer, winter snow sports guys are often biking in summer, and so on, so we see we a lot of cross-over growth potential as we move ahead.
SSR: With such a wide array of companies in several different locations, are there any problems with distribution? Or does your large scale allow you to reduce distribution costs in a way that can both help the bottom line at your own company and with your dealers?
MDY: That is a bit of a mixed bag. We have some large distribution centers, such as the one in Kansas City where Bushnell is located, and we also distribute some from our factories, and also some from Canada. Where we source product from out of the country we run it through U.S. distribution centers. When we can ship direct from a high volume manufacturer like our ammunition guys, it really helps. We are focused improving our speed to market and order response. I do know that from the top down we will not succeed unless distribution is solid, our retailers succeed, and everyone makes money.