Robert Marcovitch Explains The Deal Exclusive Interview With Ride’s CEO

So, are you breathing a little easier these days?

Yeah, a little bit, mostly because I feel very confident that the deal we did with K2 is in the best interest of the majority of the people involved. We all wanted to keep the momentum of the Ride, Liquid, and 5150 brands going. We talked to a lot of people because the company wanted to make something happen that would make the most sense for the company and its shareholders. The S-4 document filed with the SEC really tells the tale in the clearest way. There’s not a lot that I can add to that.

So what will be Ride’s business strategy after the deal is completed?

We’ve had many discussions with K2, mostly scenario-building exercises about product, distribution, and other operational and financial matters. Of course, nothing will actually happen until we receive shareholder approval and the deal is done. The strategy is to make this change of ownership in the most seamless manner possible with the least amount of disruption to everyone involved.

The key factor for everyone to understand is that K2 was and is interested in our brands-not just our brand names.

They could have gambled that what happened to other brands was also going to happen to us. Perhaps they then might have been able to purchase the company or its assets for a lot less than they paid for Ride.

But assets like tables, chairs, presses, and inventory don’t make a brand. Ideas, culture, passion, direction, and authenticity make a brand, and I believe K2 knew that and did not want to see any of those intangible things disappear as they often do when businesses are sold. In our industry momentum is everything, and keeping that momentum involves retaining as much of the business as possible with the least amount of changes. That appears to be what K2 wanted, and because of that it’s business as usual here at Ride.

We’ll be able to maintain the momentum we generated last year. That was definitely at risk without K2’s involvement. As a result of this merger we don’t foresee any major disruption in our businesses or change in strategy once the deal is completed.

We’ve already sent a letter out to our dealers that says we have no planned changes as a result of the deal for our product, marketing, and existing distribution channels of the brands.

Of course, we’re looking at the synergies between the two companies to ensure a long and prosperous future. What is supremely important is that K2 understands that when you buy a company as unique as Ride, there is a need to keep its special attributes intact.

How will K2 manage Ride so that momentum continues?

In my opinion there are many business models that you can point to that show there’s an opportunity to grow and support five snowboard brands, whether it’s the Porsche/Audi/VW model or all the brands that a company like Kellogg’s or Procter Gamble controls.

So it’s not hard to find models that have worked extremely well for brands, retailers, and consumers. The key is having the right people and the discipline. I’m pleased to know we have both, and that bodes well for us going forward. K2 has been clear from the outset that it will support an environment that allows our brands to continue to develop their own personalities and enables our people to do their thing.

So you don’t see any change in distribution?

We don’t see any need for changes in our distribution strategy. It has been a key factor for our success with our retailers. We’ve carved out the niches for our brands and have proven ourselves successful as a result.

Where will the Ride offices be located?

There has been no decision regarding where the Ride offices will be located. In fact, there’s been no decision on any of the facilities.

Because K2 is located nearby this deal will be a lot easier on our employees than if they had to take German lessons.

Everyone needs to understand that this is a deal that will maintain thatomentum we were talking about. To their credit, I think K2 realizes that you can’t go out and create a good team of people everyday.

All the brands that K2 will own have distinctive personalities. Of course, all the brands will need some sort of alignment within the K2 company, but I think what this deal does is cement the fact that there will be other authentic snowboard brands besides Burton that will enjoy life in the twenty-first century.

How will this deal affect the snowboarding industry?

First, from a consumer’s point of view, it assures participants that whether they are just learning to turn or doing backside rodeo sevens, they’ll have an assortment of high-quality innovative products in the stores that best suits their performance needs in the years to come. I think that’s good for the sport and therefore the business.

Equally important, they’re sure to find product that matches their personality and they won’t find themselves on the hill looking like they’re in the same uniform as their friends. Individuality is important to the long-term health of our industry. The consumer continuing to have a freedom of choice of great equipment from solid makers is very important to everyone.

Financially strong, reliable, well-focused brands with distinctive personalities will keep snowboarding special. That’s good for everyone in the industry and we’ll be able to offer the marketplace choices that are so important to everyone.

This goes for retailers as well. I hope that retailers see this as an opportunity to invest their open-to-buy dollars in snowboard gear with a greater level of confidence than ever before. Brands like Ride often do not have the financial clout to do everything they need to do to compete. This deal assures the long-term health of much needed brands in the marketplace.

Retailers make a substantial investment in the snowboard brands they carry, and with the deal these retailers now know that Ride is firmly backed and positioned as the niche brand they need it to be.

We made lots of difficult decisions at Ride in the last year that benefited retailers and consumers. We can now continue to make those decisions and benefit from our actions. We can safely make long-term plans that are executable. That’s good for everyone in this industry. We’re now able to concentrate on developing great snowboard products at all pricepoints. By doing that we can continue to raise the bar on the whole industry, which in my mind is good for everyone.

So what are the chances that this deal won’t go through?

The deal is subject to shareholder approval, but I hope that I made it absolutely clear in the S-4 why this deal is in the best interest of the shareholders. Those shareholders who wanted to support a Pacific Northwest company still are. Those shareholders who wanted to invest in a snowboard brand still are. Those shareholders who wanted to invest in a growth stock still are.

Is K2’s corporate culture similar to Ride’s?

What I found most impressive about K2 CEO Rich Rodstein is that he’s highly passionate about the snowboard business at all levels. Rich believes that the combined companies will be able to increase their investment in the snowboard industry resulting in improved products, marketing, and service levels. He is someone who is always pushing to do things better. He loves the product. He clearly understands that big is not necessarily better when it comes to the consumers we’re servicing.

Burton has done a superlative job of making themselves look far smaller to our audience than they really are. For our market, that’s a brilliant strategy. Building a business as K2 has allows the brands it owns to operate in their accustomed style and yet enjoy being a member of a much larger family when it makes sense.

So what’s your career plan?

On October 5, regardless of how the shareholder vote comes down, you’ll likely find me in a bar with my friends at Ride reminiscing as we do when major events like this vote take place. I guess the polite term is that I’m in transition.

My five years of experience with the Ride organization should stand me in good stead, but I’m realistic and know that the company doesn’t need two CEOs.

Don’t get me wrong, I’m not running for the door either. K2 is a pretty exciting organization with a lot happening in several different arenas. I hope that my strengths have been noted and if all goes well K2 would like me to remain with the company. There were no golden parachutes as a lot of the people in the Internet chat rooms were saying, so retirement is not an alternative for me.

I think the thing that I can be most proud of is that in the midst of really difficult circumstances, we were able to keep the momentum going at Ride and keep a dream alive for those who have put in such a tremendous effort of late and those who toiled for the brands in days gone by. We kept it going well enough that a company like K2 looked at us and likely asked themselves, “How can a company with the types of challenges they face do what they do?”

We kept our family here intact and formed a culture in the most difficult of circumstances. I think K2 saw the enthusiasm on the faces of the people and asked themselves, How do I get this,” and realized that it’s not from buying the parts but by getting the full meal deal.

It was a critical point in the brand’s history, and by preventing us from falling off-track, I believe you will see our family of people and brands grow and flourish within this industry in the manner with which they richly and rightly deserve, and you will see the positive impact this transaction will have on our sport and our business in the years to come.iends at Ride reminiscing as we do when major events like this vote take place. I guess the polite term is that I’m in transition.

My five years of experience with the Ride organization should stand me in good stead, but I’m realistic and know that the company doesn’t need two CEOs.

Don’t get me wrong, I’m not running for the door either. K2 is a pretty exciting organization with a lot happening in several different arenas. I hope that my strengths have been noted and if all goes well K2 would like me to remain with the company. There were no golden parachutes as a lot of the people in the Internet chat rooms were saying, so retirement is not an alternative for me.

I think the thing that I can be most proud of is that in the midst of really difficult circumstances, we were able to keep the momentum going at Ride and keep a dream alive for those who have put in such a tremendous effort of late and those who toiled for the brands in days gone by. We kept it going well enough that a company like K2 looked at us and likely asked themselves, “How can a company with the types of challenges they face do what they do?”

We kept our family here intact and formed a culture in the most difficult of circumstances. I think K2 saw the enthusiasm on the faces of the people and asked themselves, How do I get this,” and realized that it’s not from buying the parts but by getting the full meal deal.

It was a critical point in the brand’s history, and by preventing us from falling off-track, I believe you will see our family of people and brands grow and flourish within this industry in the manner with which they richly and rightly deserve, and you will see the positive impact this transaction will have on our sport and our business in the years to come.