Age 55 is when many men start thinking about retirement. Tim Petrick, who turned 55 on Friday (8-21), is thinking about anything but.
The new vice president of global sales and marketing for Rossignol, Petrick left the relative cushiness of his position at K2 to try to help turn around the struggling ski giant.
TSIL caught up with Petrick in Moirans, France. Petrick has set up his office in the huge new headquarters that was started during the Quiksilver years, prior to Rossignol being bought in 2008 by Bruno Cercley. The Quiksilver ownership saw the venerable ski brand's fortunes decline and its financial problems have been well documented. Petrick pointed out that the money for the new building had already been committed, and that instead of having employees spread out among three locations as has been the case up until now, everyone would be housed under one roof. (A roof, incidentally, designed to reflect the lines of the massif that stands behind it.)
Currently, Petrick is dividing his time between France and his home in Seattle. His younger son will be a senior in high school this year, and when he heads off to college, Petrick plans to make the full-time move to France with his wife, Michelle. Right now he is accumulating massive frequent-flyer points, alternating two weeks in the U.S. with two in Europe. And while he's not thrilled to be away from his family, he is really enjoying what France has to offer. He has been doing a lot of biking, including a climb of the notorious Alp d'Huez.
About a month into the new job, his biggest frustration is that it is August in France. That means everyone - tout le monde, at least the French monde - is on vacation. So Petrick is virtually alone in the palatial new digs, which will be ready for full occupancy this fall.
TSIL: Whatever possessed you to take on this challenge?
TP: It was a great opportunity. I wasn't looking for it. I enjoyed working at K2, but I had a chance to help rebuild a brand that had fallen on hard times. It's exciting to add a new culture and learn European business first-hand - and to reinvent myself at 55. Taking on a great challenge reinvigorates me.
TSIL: What's the plan?
TP: The first part of the plan is to try to stop losing money. We're trying to evaluate all the categories of business that we're in and brands that we have within the portfolio and trying to determine which ones make money and which ones lose money, because clearly, when you lose in excess of 40 million euros in fiscal 2009, which ended last March, and you're planning on losing another 8-plus million in fiscal 2010, which ends this March, this is not a sustainable business plan. You've got to figure out how to stop the bleeding, see where and how you're losing money and correct that. And number two is to go back to basics with the brand and get Rossignol (the group of Rossignol products including Dynastar, Lange and Look bindings) focused on fulfilling market needs and becoming profitable to the retailer and for the company itself. There are obviously a lot of pieces and parts to that; there isn't any one magic bullet. If there was, someone would have already shot it. It's a lot of basic issues from the supply chain to product development to customer service on a global basis. It's how the brands are positioned and marketed on a global basis.
There are an enormous number of projects we're involved with, and you combine that with this is August and everyone is on vacation. You want to get going and now there's basically a four-week interruption and all the players aren't here. It's hard to execute without everyone here. That said, we'll get there.
There are lots of issues with the retail community with the Rossignol brand in terms of where it's been in recent years, but on the other hand, I know the brand is still really strong in the hearts and minds of the consumer. With the right business strategy here, I'm absolutely sure we can come back.
TSIL: Is Rossignol planning to streamline its collection?
TP: Absolutely, the model line for next season - which I inherited - is already streamlined from prior years, but that said, in my mind, there's still far too many models and we haven't figured out a solution to the unique aspects of the North American market versus the European market so we have multiple collections. We have an international collection, we have a European collection, a North American collection, and all that means you have to make more samples, it makes your marketing and communications more complicated and it takes more time to design all these things. My objective for 2011-12 is to radically simplify the collections so they are focused on big-block consumer types rather than micro-niches as they are now. That, of course, is also easier said than done. The objective is to rationalize these model lines and make each SKU as effective as possible. The typical European mentality is to throw everything against the wall and see what sticks, rather than saying this is who we are. Rossignol obviously has a great heritage of hard snow, high performance race heritage kind of product and Dynastar has a heritage being in the shadow of Chamonix, of big mountain skis and freeride and a great niche for women. What I want to do is pull those two notions into closer focus so we can define ourselves. I don't want to be everything to everybody; I want to be something to somebody.
TSIL: What about softgoods?
TP: Rossignol softgoods was doing exceptionally well prior to Quiksilver and had gotten up to in excess of 30 million euros in annual sales. For one reason or another, it was down to about 10 or 11 million euros. It had a nice run but had fallen off in the last few years and the intention now is to go ahead and license that business - it's probably not our core competence - so we're looking for a licensee at this point and pretty close to signing one, but we still want to have a very close association because the softgoods, if it fits in with the hardgoods collection - whether it's race, all mountain, youth or women's - it's got a better chance of having an integrated merchandising look that will resonate with retailers and ultimately, with consumers. In the Quiksilver years, it got pretty separated. It was more like a lifestyle piece. So this is a big project too. There are no small projects here. They're all big, hairy, extreme projects.
TSIL: What do you see as hardgoods trends?
TP: There's a general trend toward wider skis, but there's also still a customer out there for narrower skis and hard snow skis. I've spent an enormous amount of time on very wide skis, as a skier and with my previous employer, and when you get on narrower skis you go, you know what, these are kinda fun. They're quicker and more agile; of course there's a tradeoff for soft snow but if you primarily ski on groomed snow, which a lot of people do, I think that the pendulum is going to swing back a bit. There is a market for skis that are narrower than 80mm underfoot. A lot of companies, and retailers, have gotten the notion everybody's got to be on 80, 82, 84mm wide skis, whereas if you're skiing at Stowe, Vermont or Hunter Mountain, what do you need an 80mm wide ski for? The snow is super hard, you're making short radius turns, it doesn't really make a lot of sense. This is true in Europe where a lot of people never want to go outside the signposts. They want to be on the groomed piste. The end game is to make it more fun. The market has separated between hard snow, all-mountain performance and soft snow, off-piste adventure kind of performance. And of course women's is a hugely important category that Rossignol has been part of for a long time, Dynastar has been part of for a long time. We have to have authentic, graphically interesting women's product to keep women in the sport, because if women aren't in the sport, it's going to be a much smaller place.
TSIL: Have you considered that the skiing market is getting older?
TP: Yeah, the challenge of that is that none of them want to feel older. We're looking at the weight of the equipment, especially with the (Look) bindings. Bindings need to be put on a diet somehow so the whole system isn't as heavy as it is currently. It's an extremely difficult marketing challenge to figure out how are you going to have a product that's designed for a real consumer group out there....
They do it in Japan. K2 has done it quite successfully with a thing called the Miura Classic (named for Yuichiro Miura, the first man to ski down Everest). They have a classic series which is shorter, lighter weight, easy turning, not very good at high speed stability but the average 70-year-old probably doesn't want to go that fast. So they're doing it. And they've got a great icon in Miura. But it really hasn't come back into the United States, although in my prior life I thought there really is a segment here that we should be tryiing to talk to, but how do you do it? My knees hurt, right? I'd like to have something with sorbathane under my feet. I thnk it's possible.
TSIL: On the other end of the spectrum, Rossignol is known for racing. There are rumors that Lindsey Vonn has defected.
TP: She has defected. She's gone to Head. We cut everybody's base retainers 50 percent, which would have had an impact had they had the results, of maybe 10 or 15 percent in their full year compensation - assuming they had the same race results as the prior year. Because most of this is back-end loaded - they get a base retainer, but where you really make money is when you win a World Cup or when you win a World Championship or an Olympic medal. So the actual financial impact of 10 or 15 percent that we ask the racers to accept is, frankly, completely consistent with every executive at this company and every company in the ski business has had a 10 percent-plus reduction in wages, in benefits, 401ks taken away, not just at Rossignol but at every ski company in the world. So everybody has taken a cut in pay. So 197 racers accepted that cut in pay. Unfortunately, Lindsey felt she couldn't deal with that and we obviously wish her the very best. She was a spectacular racer and it broke our heart to see her leave. But life goes on. Racing is still an extremely important part of Rossignol's heritage and its marketing message and its authenticity. It's part of who this company is. It's part of its DNA. We'll still stay involved in racing post-Olympics, no question.
TSIL: What is the status of racing right now?
TP: Even in Europe, It's very regional. In Germany, it means less and less. In Austria and Italy and Switzerland, it's as important as it ever was. In France, it's probably neutral; freeride and extreme skiing are equally as important there. In North America, it hasn't made a heck of lot of difference in a long time. It hasn't really been a decisive factor in ski sales in maybe 20 years. Racing in North America never managed to capture the imagination of the general skiing public, and I don't think it will until racing somehow reinvents itself. You know, the whole format, people on very short skis skiing around breakaway gates dresssed up like gladiators on snow that's as hard as concrete - that has so little connection to what normal people aspire to. The last thing most of us want to do is ski on a slope you need crampons to stand on. The radius of the turns has become so extreme, the course setting has become so severe, in order to challenge the athletes with the short skis and radical sidecuts, it's not the beautiful flowing thing we saw in the '70s. Virtually nobody makes a turn like a slalom skier anymore, and maybe super G and downhill are sort of more what we aspire to as skiers, but the snow is so hard and the speeds are so high it's not like most people want to do it. TV coverage has been cut way back, but there's still the Kitzbuhel downhill where 100,000 people show up.
TSIL: So how do you incorporate the racing heritage?
TP: The fact that you have the engineering and ski design expertise to make a ski perform in an exceptionally difficult arena like a World Cup race course, suggests that you can also make a ski for a recreational skier. You can detune that performance and make it so that a recreational skier can have more fun on the slopes, and I think that Rossignol has made some wonderful skis over the years, as has Dynastar, and you have a bunch of engineers who all day think about how do I make a ski that makes a better, more precise turn. That kind of in-house expertise is one of our assets.
TSIL: What's your timetable for turning the company around?
TP: It's probably a one- to two-year proposition to really get the Rossignol brand, on a global basis, firing on all cylinders. I'm probably an optimist. If we had no consumer image, I wouldn't know where to start. But we still have a lot of equity with consumers. Then it's just a question of fixing the basic, 101 kind of things that you've got to do to have a robust supply chain, to have the right products come to market - on time, in the correct quantity, at the right prices, at the right dealer margins that you can make money with - all those things really are not rocket science and if we can get the group all pulling the rope the right direction, and redefining it's definition of success, by the way. The company's definition of success previously was to be the number one unit volume player in the world. Our definition of success going forward is to be the most profitable ski manufacturer in the world. We want to provide a return on invested capital because there's a load of invested capital sitting out there in this brand that you need to provide a return on. That's just the reality of the business world today You don't pull millions of dollars across the table without getting a return better than you can get on a certificate of deposit. And currently it's not getting as good a return as a CD. In fact, it's negative. It's like the stock market - was. You put money in and every month you've got less than you started. Well, that's not a business. So, it's not going to happen overnight but I do think it's very possible. And I would just say - it's certainly a whole different kettle of fish, in a way, but when I went to Olin in 1989, Olin had 100 percent negative ratings with retailers. One year later, we had 100 percent positive ratings. Olin has subsequently gone away but what happened at Olin can happen at Rossignol. Rossignol is a much bigger brand than Olin ever dreamed of being and all that I helped orchestrate with Olin was to get back to the basics: define the brand, provide great service, provide great product at the right prices, deliver them on time, and everybody's happy. It's not that hard. The retailers would have liked to support Rossignol but unfortunately, we've lost some dealers. In the last few years, we've lost some really key dealers and we want to earn their business back. It's pretty straightforward but it's not going to be easy.
The people here have been so welcoming of me in this whole enterprise, which is really encouraging. I've gotten an enormous amount of support from the French team and the people up in Switzerland and Germany. They are super-open to everything that I've brought up and seem to be really wanting to succeed - and by succeed I mean how to make money. It doesn't matter if you're a global brand if you're bankrupt. Small is beautiful. That's Bruno's message. If you're small but you're profitable, that's a good thing. Then you can grow step by step.
It's not unlike putting a lemonade stand out in front of your parent's house when you're a kid. At the end of the day, if you've sold all the lemonade and you have money left in your till, then you've had a successful day. If you've given away all your lemonade and you owe people a bunch of money, you obviously didn't do it very well. Business is not that hard. You've got to end up with more than you started with.
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