Dive Brief:
- Kent Outdoors, the outdoor equipment retailer that includes such brands as Kona Bicycles and Arbor Snowboards, tapped veteran finance chief Rob Otto — who most recently served as CFO/COO of private label apparel designer RW Designs and before that held the finance chief role at Z Galleries, a home decor retailer — as its new CFO, the company announced last week.
- Otto is joining the privately-held Park City, Utah-based company as it transitions on a number of fronts; it announced last week that it had received a new $100 million credit facility from the asset-based lender Eclipse Business Capital as it is also making operational and management changes. Heavy hitter Lee Belitsky, who stepped down from the CFO role at Dick’s Sporting Goods in 2021, became executive chairman and president at Kent in February, according to his LinkedIn profile.
- With that fresh credit and new leadership, the company conducted a strategic review which led to its decision to seek a buyer for Kona. “This move allows the Company to direct its resources toward investment in its key water sports businesses. The bike industry has faced very significant challenges in the post COVID world and Kona has not been immune to these headwinds,” the company said in a statement.
Dive Insight:
With Otto, the company is gaining a veteran and classically-trained CFO. He is a CPA who held the dual roles of CFO/COO at four companies including Hudson Jeans, Big Strike and Affliction Clothing, among others. He earned a Bachelor of Business Administration in Accounting and Finance from San Diego State University and early in his career was a manager at the now defunct accounting firm of Arthur Andersen, according to LinkedIn.
"Kent possesses some of the most recognized names and brands in the industry and it is my goal to ensure the company remains an industry leader while enhancing operational capacity and processes to ensure our facilities and people are operating at their peak," Otto said in a statement.
Kent Outdoors was previously owned by private equity firm Seawall Capital. In October Seawall announced that Kent Outdoors would be relocating its hybrid headquarters to Utah, from Ohio, though it maintained key hub locations. For example, Kona Bicycles product design team was to remain in Washington State, Kent said in a release.
But uncertainty that has swirled around the fate of the company’s high-end Kona mountain bike maker has caused a stir in the sector. At one of the largest consumer biking industry events, known as Sea Otter, which took place in Monterey, California, last week, the brand initially had a tent but took it down before the event even started, according to an April 19 report on the cycling tech blog Bikerumor which was carried by Yahoo!Finance.
“The move is a head-scratcher for a number of reasons — the brand had just unveiled a new adventure bike as the show opened, and it seems like a strange move considering they had already paid to get their booth to the venue and set it up,” the report states.
Comments on Kent’s corporate LinkedIn page announcing Otto’s appointment reflected some of the frustration related to the fate of the beloved bike company, with one commenter asserting Kent had done “irreparable damage” to suppliers and customers, along with another seeming to underscore the weight of the planned sale.
“You own a bike brand with one of the most unique celebrated and awesome stories in the industry,” one writer said. “All eyes are on you now.”
The bike industry enjoyed a robust demand during the pandemic but that boom faded — albeit with electric bikes remaining a bright spot — as people and many businesses were left with bloated inventory that they are still trying to move, according to The Daily Outdoor Retailer.
Kent did not immediately respond to a request for comment.
Editor’s note: This story was corrected to show that Kent Outdoors is no longer owned by Seawall Capital.
