Columbia Sportswear: An American success story

By Margaret Steen

Second-generation chairman Gert Boyle and her son, CEO Tim Boyle, have weathered severe storms along the road to prosperity as leaders of a publicly traded company.

Columbia Sportswear Co. began in 1938 as a small hat maker. Today it’s a public company with almost $1.5 billion in revenue, known for its durable outdoor apparel and humorous ad campaigns. It’s on its third generation of family leaders, with participation by the fourth.

On the way to writing their own version of the American family business success story, the family owners of Columbia have overcome some tough obstacles.

Second-generation chairman Gert Boyle, now 87, lived in Germany as a child. When the Nazis rose to power, her parents, Paul and Marie Lamfrom, fled Germany and came to Portland, Ore. Her father, who had left behind a business that he’d owned in Germany, found a small hat company for sale. He bought it in 1938 and named it Columbia Hat Co.

Gert Boyle remembers working at the company during summers, putting labels on cartons and nailing crates together for shipping. “You did anything you were asked to do,” she says.

She moved to Tuscon in 1943 to attend the University of Arizona and graduated with a degree in sociology. There she met Neal Boyle, who worked selling vacuum cleaners while getting his degree. The couple married in 1948.

In 1949, Gert and Neal Boyle moved to Portland from Arizona with their young son Tim. Neal went to work for Gert’s father’s company. By the late 1950s the company had begun selling a few outerwear items such as skiwear in addition to hats. It became known as Columbia Sportswear in 1960. When Gert’s father died in 1964, Neal succeeded him as president.

“My first recollections as a kid were all about the business,” says Tim Boyle, 62, Columbia’s current president and CEO. “I’d visit my grandparents and my dad when they were at the office, which was in downtown Portland.” In junior high, he worked at the company, sweeping floors and doing other odd jobs.

Gert recalls being constantly in the loop about what was going on at Columbia while she was raising Tim and his two younger siblings. “When you have a family business, you hear it at breakfast, lunch and dinner,” Gert says. Even so, she was happy in her role as a mother.

Tim went to the University of Oregon in Eugene and planned to go to law school after graduation. “I always kind of thought in the back of my mind that I would like to work at the company,” he says, “but it was a very small company.”

But on Dec. 4, 1970, everything changed when Neal Boyle died suddenly of a heart attack.

Shortly before he died, Neal had taken out a $150,000 Small Business Administration loan, pledging his home and Gert’s mother’s home as collateral. The family’s survival was tied to the business’s survival. “We had to make it work,” Tim says. “We didn’t have a choice.”

Putting aside his plans for law school, Tim commuted to and from Eugene, where he was about to graduate from college, to help his mother run the business.

“We pretty quickly made every mistake in the world,” such as firing employees unnecessarily, he says. “Things were bad, and then they got worse.”

Looking for a way out, they tried unsuccessfully to sell the company. At one point, Gert recalls, she almost succeeded. But when it came time to sign the final papers, the would-be buyer had a list of additional demands. She realized she would walk away from the sale with only $1,400.

“I thought, ‘For $1,400, I’ll just run it into the ground myself,’” Gert says.

Instead of calling the loan, the bank suggested that the Boyles find an adviser to help them, which they did. It was the first step on a path toward stability and then growth.

One of their early realizations, Tim says, was that the company was making too many items too soon. “We needed to narrow the amount of items that we offered for sale and increase the geographic sales of those items,” he explains. With the goal of selling a large volume of a smaller group of products, Columbia branched out from its traditional sales area of Oregon, Washington, Northern California and Alaska and started selling products in other areas of the U.S.

It took almost a decade “before we had a positive net worth of any significance,” Tim says. And although it was not the life he had planned for himself, he did see increasing success. “And at the same time, all my buddies that had gone to law school were trying to get out of the business to do something else,” he notes. “I don’t know that anybody envisions what ends up happening.”

Growth and a public offering

The company stabilized and then began to grow, with new products driving the increased sales. In 1975, Columbia was the first company to introduce a Gore-Tex parka; it developed its own proprietary waterproof technology in 1991. In 1986, it offered its first Bugaboo parka for skiers. It introduced a line of footwear in 1993.

“We had very dramatic growth with a small collection,” Tim says. “Then we would add to the collection and grow more.” Today, Columbia sells about 5,000 styles.

The company’s decision to import products from Asia instead of making them at its own factories also contributed to its growth. Today Columbia’s products are made by contract manufacturers, primarily in Asia. As of the end of 2010, Columbia had a total of 3,626 employees, with about 2,200 in North America, 1,000 in Asia and 400 in Europe.

Columbia won customers over with what the company calls “the mother of all ad campaigns,” a series of ads that featured Gert and Tim Boyle and ran for more than 20 years starting in 1984.

“From the beginning, we realized that retailers in the United States don’t need another brand to sell, and at the end of the day, consumers don’t need another jacket or hat,” Tim says. “Our products are not like bread and butter; they’re not a requirement, and we have plenty of competition. There’s really no reason for anybody to buy our stuff unless we can make it demonstrably different.”

The ads capitalized on what made their products—and their company—unique. They emphasized features of the apparel, as well as the fact that a family stands behind the items.

In one TV spot, Gert drove a snowplow that covered Tim—clad in a Columbia winter jacket—with a giant pile of snow. In another, she piloted a helicopter that dropped Tim and his Columbia outerwear onto a snowy mountaintop. The tag line for both: “Tested Tough.” Print ads featuring Gert carried slogans such as “My mother makes combat boots” and “She snaps off necks and hacks off arms” (to check the insides of Columbia’s jackets).

The campaign was born when an advertising agency asked the Boyles what set Columbia apart from other companies. “It’s like a bad meal that you remember more than you do a good meal,” says Gert. “Our ads, I thought, were comical and a little corny. But they were funny. People would remember that company where the mother and the son do that funny stuff.”

As the market evolved, so did the company and its ads. The company realized that “the man who’s going to go skiing is probably going to go hunting, he’s probably going to go fishing,” Gert says. “People became aware of the fact that we not only made winter clothes but also summer fishing stuff.” This shift led to ads that focused more on the products’ benefits than on the personalities of the owners.

Over the years, younger customers have been gravitating to the company, Gert says. “It used to be that it was [an older] family that purchased Columbia stuff,” she notes. “Now younger people have a lot more money.”

In 1998, the family decided to take the company public. “We wanted to make sure that we had a broader ownership with the risk more spread [out] than it was just as a family business,” Tim says. They also wanted to be able to offer equity to employees so they, too, could benefit from the company’s growth.

The family retains control of the company even though it is public. As of the company’s most recent filings, Tim Boyle is the largest shareholder, with 43% of the shares. Gert Boyle is the second-largest shareholder, and family members including Tim Boyle’s sisters and children also have an ownership stake. Family members own more than 60% of the shares.

Even with family control, as a public company Columbia Sportswear must disclose more information than is required of a privately held business. Columbia’s revenues for fiscal year 2010 were $1.48 billion; the outlook for 2011 is about $1.7 billion.

One key reason why many family business owners prefer to keep their companies private is that doing so lets them keep the details of their business to themselves; it spares them the pressure of having investors evaluate their earnings each quarter. But Tim views the disclosure as good for business.

“Going public made us a better company,” Tim says. “Some private companies are very cloistered around information—when you’re working with the management team there’s always, ‘Well, we can’t tell them that.’ Being public made it very easy: We told everybody everything. It was highly transparent, and it really encouraged a lot of thorough thinking on the part of our management team. It allowed us to attract a very high-quality board of directors, which has also been really good for the company.”

Managing a public company, Tim says, means “I occasionally have to take off my hat as an employee and manager and put on my hat as an investor.” He’s unfazed about quarterly performance metrics: “While it’s challenging to be measured quarterly, I think it’s not a bad thing,” he says.

Columbia’s IPO paved the way for a series of acquisitions. The company acquired boot maker Sorel in 2000 and Mountain Hardware in 2004, the same year it reached $1 billion in sales. In 2006 the company acquired Montrail and Pacific Trail Products.

Innovating toward the future

Columbia continues to aim for innovation in its product development. For example, Omni-Heat is a thermal technology that helps a jacket’s wearer retain heat and stay warm in the coldest conditions. The technology, which took years to develop, required a long-term focus, Tim notes. Employees are also on the lookout for product improvements that can be made quickly. Innovation is “everyone’s responsibility,” Tim says.

Though Tim runs the day-the-day operations, Gert remains chairman of Columbia. She still signs the company’s expense checks. “If someone knows that you’re looking at the expense account, they’re maybe a little more careful,” she says.

The ad campaign, Columbia’s success and her 2005 memoir One Tough Mother have made Gert Boyle a public figure.

This visibility has not always been positive: In a November 2010 incident that made global headlines, Gert foiled a kidnapping attempt. A man posing as a deliveryman pointed a gun at her as she arrived at her home. When he ordered her inside her house, she told him she was going to turn off her security system. Instead, she pressed a silent alarm that called police. Three perpetrators eventually pled guilty in the case, which drew national headlines. They are currently serving prison sentences ranging from five to nine years.

The family declines to discuss the kidnapping attempt. However, in March 2011, Gert Boyle submitted a victim impact statement to the court. In it, she said, “No words now are adequate to reverse the memories of that night or give me my treasured and ordinary life back.… Before the attack, in countless ways, every day, I enjoyed the simple routines of life—going to the grocery store, having lunch with friends, enjoying my independence and the comfort of my home. Since that night, I have not returned to my home of nearly 24 years except to gather my belongings. I don’t feel safe living alone, and I no longer am able to enjoy the simple freedoms of everyday life.”

Outside of Columbia, Tim has branch-ed out into a new venture with his son and daughter: Gearhart Golf Links, the oldest golf course in Oregon, on the state’s northern coast. “It’s a fun golf course, and it’s great for the community,” Tim says. “It can be a lot better.” He plans to improve the quality of the course.

They have hired a management firm to run it, but he views the property as “something for my kids and myself to spend time on.”

Looking to the future, Tim is ensuring his children, Joe and Molly, understand the different roles family members can fill at Columbia.

“We’ve had a lengthy discussion with the kids about the various hats you wear: You have to be an investor and an employee,” Tim says. The children own some shares of the company and will likely get more. “We need to make sure they know the difference between being an employee and being an investor.”

Tim says he thinks it’s good for family members to work elsewhere for a time. His son, who is in his early 30s, now works at Columbia as a merchandising manager for the company’s equipment and accessories line and performance fishing and hunting gear, but he had an outside job before that. His daughter, who is in her mid-20s and is currently working outside Columbia, has worked for the family business in the past. One of Tim’s two sisters worked there for a time, as well.

“As a public company, anybody that works here that’s related has to be listed in the proxy,” Tim says. “We’re very transparent about reporting.”

What about succession? “My mom still comes to work every day, and she’s 87,” Tim says. “I’m planning to get at least that far along.”

Margaret Steen is a freelance writer based in Los Altos, Calif.

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Agenda 2011

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