news & comment for UK leisure marine businesses

Helly Hansen has one of the longest histories of solidly technical background, but just five years ago it managed to blow itself a long way off course, being sold on from one private equity company to another...

So, how could it turn itself so completely that it looks like achieving record results? In financial terms 2011 looks like outdoing 2010 - the company’s best so far. In fact the company expects this year’s growth to be up 20% in terms of sales and net profits to double.

Peter Sjolander of Helly Hansen admits Helly went through some very tough times between 2000 and 2007 and for a while even delivered sub-par sailing clothing. “You would think that with over 130 years of experience in this area we really should not be able to wander that much off track, but we did,” he says. One mistake was getting into the already saturated action sports arena, he explains. “There were already a lot of really good brands in that area already, so nobody needed us.”

Oddly, this chastening experience left Helly in a really good shape for taking on the economic lows that were to come. “We had to turn every stone, we were doing so poorly, we had to sharpen up – it was a matter of survival. Logically it makes sense, other companies that seemed to be doing well enough before the recession might not have been driven to re-evaluate every part of the business, redefining course, purpose, and equations from the ground up.

Since Helly has research “in its DNA”, Mr Sjolander explains that the way back was probably always going to be the R&D route – and this was laid open by finding a bunch of people willing to be used as human guinea pigs.

Mediocre offering
“We knew we had a somewhat mediocre offering, so we talked the Ericsson team into being our live laboratory.” Back in 2007 Helly equipped the team on the outset of its Volvo race from the UK, then a team of developers met the crew in Cape Town, and were debriefed (forgive the pun) as to what the team did and didn’t find useful to wear.

Two weeks later they were shipped new gear. The same process was put in place in India and then in China. At that point, the sailors said, “we don’t want you to change anything”.

“The proof has been that in the last two years we have sold out too early, even on the most sophisticated offshore technical gear. While it’s true it means we didn’t get the quantities entirely right, the fact that it’s been like this is good testimony to what we learnt.”

He adds, “In the simplest of terms, Helly is now where it wants to be,” although he adds that the company fully appreciates that it has a lot of very skilled competitors that will continue to create challenges.

Nick Gill says this sense of knowing what the company is about has helped Gill buck the downturn – at least so far. “It is pretty competitive out there,” he says, “but we are certain about sticking to our core business – we are a technical marine clothing business, not a fashion brand, we don’t even think about the high street, and this keeps things simple.”

It seems to be working: Gill has had the best three years ever, with this last one breaking all records. However, again, a spread across markets seems to be the way to iron out some of the peaks and troughs.

Exports in particular are driving the business, with international sales accounting for 70% of Gill’s total. And these are rising: sales in Germany are up by 35% while France and the USA, surprisingly, have seen sales up by around 20%. “Whilst we are cautious, we are cautiously optimistic,” says Mr Gill.

Many opportunities
He goes on to say, that there are still many opportunities for technical innovation. “Having hung our hat on technical products and choosing not to look at fashion with its twice-yearly changes, the company has been free to research new ways of producing items.” Its prices aren’t the cheapest, but Gill makes sure its products represent value; Mr Gill adds that a quarter of the company is involved in R&D and quality control.

Henri Lloyd has an identity that crosses both technical marine and lifestyle markets, “so that puts a slightly different slant on things from a brand point of view”, says David Peach of HL.

It came about from one of those rare twists of fate that can dash a brand’s hopes or, as in HL’s case, raise them to the stars. The 1980s saw a wholesale take-up of HL’s navy blue Consort jacket by the Milan Scooter Society which, along with Levis and Timberland deck shoes, defined their extremely fashion conscious look. The style spread its influence up through Europe and even into the Scandinavian countries: “It meant by the mid-eighties we were getting multiple Queens Award for exports,” says Mr Peach.

But it also meant the brand got an international foothold quite early on. And in this present economic climate, “a spread across markets is a very good thing”. HL is now in over 52 markets, and has varied its ways into them, partly depending on the local culture.

In Scandinavia there are the big department stores with dedicated brand areas, while in the UK it’s very much built on a retail partnership base. Having said this, it works very hard to even out discrepancies so it has the same kind of image across all countries, says Mr Peach.

However, HL has managed to keep its lifestyle prescence without devaluing its technical brand. Mr Peach explains that despite the Italian fashionista’s enthusiasm, the HL identity has remained very solid. “Underlining all of HL’s development is the ‘true to the sea’ motto,” he says. “It’s not about country, its not about any other sport, its roots are simply sail.”

HL’s development has been shaped in part by a continued involvement with various kinds of partners. Mr Peach explains the brand “mixes it up a bit” with links to different people and events, such as three-times Olympic gold medallist Ben Ainslie, the Abu Dhabi VOR team, and the Clipper Race which is now seeing its sixth edition with HL gear.

You and me
“The Clipper event is interesting because it's people like you and me that pay to do a leg or all of it,” says Mr Peach. However, it still pushes the envelope, and there is going to be a new version of the Clipper 70 for the next edition of the race. “The trend toward more extreme boats puts more demand on the crew – and this means more in the way of technical development.”

Of course adventures like the VOR have always been intertwined with technical developments in both fabric and construction, agrees Mr Sjolander. “Wherever there is a need or a problem, there is someone trying to figure out a solution,” he adds.

Due to Helly’s long standing co-operation with various commercial fabric developers and universities, the company tends to come in fairly early on in the game when it comes to introducing new product concepts. “For a while Helly actually made a living out of developing new fabrics so it's in our DNA to explore new solutions to old problems,” adds Mr Sjolander.

He concludes that although it sounds like a simple industry cliché, much of a brand’s success is driven by employees actually being involved in the sports themselves – plus, obviously, a lot of R&D investment. “Perhaps it’s not a novel or academically advanced approach, but it's one that has worked pretty well for us the last few years,” he says.

Henri Lloyd’s Deck Armour – part of the Shockwave series - is both a response to making the most of time on the water and the increasing demands of the sport. “As the boats are getting more extreme to sail, the physical demands on the crew are rising,” says Mr Peach, but everyone is liable to knocks and bumps onboard.

Taking a line from sports like rugby, where players have adopted various kinds of body armour, HL has incorporated impact protection in a suit. However, its use can be tailored to requirement, so it's possible to add sections as needed. For example, a bowman might want knee and lower leg protection, while another crew member who spends a fair amount of time hiking out might find they keep leaning against a guard rail line and could do with something to protect their middle torso.

Gill’s own response to the increasingly extreme boats was the introduction of its Race Collection a couple of years ago, which like the boats themselves, are stripped down, very light and high quality, with all the extras like pockets and flaps removed to be light and low windage as possible.

Hot news
However, the hot news is Gill’s new Ocean Race range is to be launched at the Tullett Prebon London Boat Show. It’s taken three years of consultation, design, testing and redesign and seen action across the Southern, Pacific and Atlantic Oceans. It’s even completed the Sydney to Hobart Yacht Race and Route de Rhum, notching up a grand total of 215,000 nautical test miles.

To give a pre-release insight, one thing that has quite literally been under the microscope is durability. As ocean going boats have very rough decks and topside surfaces for maximum grip, seats and knees get a very rough ride indeed.

A new material which is basically an epoxy resin coated nylon, has, says Mr Gill, proved over four times more durable than the usual fabric and three or four times more than the Kevlar material used on Gill’s previous Ocean range.

He explains that the new material was put on an abrasion machine which effectively just sandpapers the fabric to pieces. Whereas normal fabric takes around 20,000 cycles, Cordura goes on for 40,000 cycles and Gill’s previous Kevlar material managed about 70,000, but this fabric from the USA, just went off the scale... taking over 200,000 cycles of wear on the machine.

Mark Bulson of Finest Brands International (FBI) explains: “We’d developed the Toggi brand, but within that we began to see there was still an appetite for sailing-style products. Despite the market place being tough, the brand itself was showing the way forward.”

Part of this comes down to the fact that there are two, fairly distinct markets with slightly different, if overlapping pulls. Firstly, there are the highly technical brands, and secondly, there’s the less technical, but significant leisure side.

These lifestyle items have been given a patriotic leg up by a number of elements: the Jubilee year, the Olympics – and the sense of “the war on the home front” that has come about from such straightened conditions that it’s sometimes reminiscent of rationing. Mr Peach adds in difficult times people turn to trusted brands – although he admits there’s the other pull to save money and put off making an expensive purchase.

Classic styles
So, brands like HL and Chatham, with their unashamedly classic styles, may just be benefitting from a push toward a past which we know and understand. Unlike the present.

Further, there’s a growing trend for people shopping for outdoor clothing to look at sailing inspired or outright professional grade sailing wear. This brings in companies like Helly Hansen, already known for its authentic sailing gear, but which is now getting more and more exposure for what they can deliver in terms of style.

“After all it is what ‘Scandinavian design’ is all about... the idea that style and function are inseparable, not polar opposites,” says Helly's Sjolander.

Mr Peach agrees. “There is quite a leaning toward sailing and nautical fashion, it's become a lot more prevalent over the last few years with a lot of brands picking up sailing as an aspirational, athletic and intelligent pursuit – although customers might not be that acquainted with the sport itself.”

FBI has always been aware of the brand leaders in the market place, but it sees its offerings as complementary to names like Helly and HL. Rather than being highbrow about this, Mr Bulson says names like Splashdown play an important role. “It helps to hold the sales community together if the company offers a range with popular and solid products that are competitively priced while still having a good profit margin potential,” he says.

Mr Bulson says brands like Toggi can play an important role. “It helps to hold the sales community together if the company offers a range with popular and solid products that are competitively priced while still having a good profit margin potential,” he says.

For FBI the story goes back to its handling of both Toggi and Splashdown, developing them side by side until in 2007 the parent company realised it made more commercial sense to rationalise its activities, and chose to focus on Toggi. “Yes, we exited the Splashdown brand, but we did it with what we feel was an amount of grace, giving a year’s notice before we put it under wraps and showing respect for the people that had helped build it up.”

Different banner
He adds this means it’s been much easier to bring it back, albeit under a different banner – even though it has been a balancing act. It was a case of making sure the collection had the greatest momentum: “Good work had been done on Toggi, and just dropping Splashdown on top of it would have jarred. Further, you have to reflect on lessons learnt in the past. In difficult times, people often don’t have the room for separate advertising budgets.”

So, the company was faced with a challenge: it didn’t want to splinter the marketing spend, and end up with a weakness, but it still had a clear call for the nautical Splashdown brand.

So, FBI is bringing back the well recognised sail logo from the Splashdown range as both triangle and diamond shapes, and these became an element in the Coast to Country brand which became a bridge between the two. Further, the Freemantle style has gone back into some of the jackets in a way that allows the old name to live on.

Chatham Marine has traded for over 20 years, with its established Deck G2, Kayak G2 and Bermuda G2 core boat shoe products. Alex Peirce of Chatham explains that while these are not going anywhere, “you can’t patent the look, so you are up against other brands – and the market is flooded with options”.

However, Chatham has still positioned itself against the big boys, with the G2 range being designed to go “head to head with the Dubarry’s of the world”.

Mr Peirce explains that all of the G2 range is hand stitched and pulled tight on the shaping last, an expensive and longer process that creates a better quality product. “What this means is the shoe will hold its shape for its entire life – and we also make a point of the shoes being both soft and comfortable from day one.” So, no putting up with a pinch while feet get broken in...

Since Chatham was taken under new ownership, it’s been moving into more technical footwear. For instance the G2 Professional was launched in 2011 with a brand new sole unit. It has a special water channelling system, suction cups as well as a blown EVA sole to give a lot more underfoot cushioning. These technical enhancements have laid the groundwork for professional partnerships with the Sunsail racing fleet which is now kitted out in Chatham’s Schooner G2.

Lifestyle brand
Mr Peirce reflects on this change, saying: “While Chatham remains primarily a lifestyle brand, the idea to create a small, professional footwear range was something our stockists were asking for.” He adds that after the shoes, the company is now looking at additions on the clothing side for 2012.

Chatham tries to make little tweaks where possible, as long as these can be created without losing comfort and grip: development happens in increments, explains Mr Peirce. Here again it’s as much a matter of identity as anything else. “We don’t want longstanding customers to look at a new range and react with, ‘What on earth...?’ So, it’s been a case of evolution not revolution.”

One of these incremental moves was the Rockwell G2 wide fitting shoe that comes in with around a size and a half extra width. It was an almost immediate success, going from an idea to top seller in one just one season.

Durability is also something Chatham wants to stress in its image. The G2 range has a two year guarantee across it, so, how’s it gone? “Chatham has just approached the two year mark since it was launched, and really haven’t had many back. Sometimes there has been a boot with an eyelet out, but on looking at the general condition you just know they have been put through hell to get to that point.”

On the other hand, David Peach of Henri Lloyd points out that one of the most significant changes to the market is the reality that people have less leisure time. “I see marinas full of expensive boats – they are not actually out on moving water,” says Mr Peach.

So HL set about trying to provide kit that improves the experience of sailing – because actually, keeping heads above water in a tough climate means people are getting progressively more time-poor: it's a conundrum that most will recognise; longer working hours are the price of the bread and butter on the table.

Take for example the new Extreme Waterproof Boot for 2012. Mr Peach says: “It’s a good example where HL has looked at the conventional way waterproof boots are made and identified ways to improve things – simply by designing and producing in a new way and applying different materials. The net result will be drier and more comfortable feet in addition to the highest levels of grip.”