(This story was updated on 10/5/2023.)
New Cotopaxi CEO Damien Huang has big hiking boots to fill, taking over for founder and former CEO Davis Smith as the brand moves from an emerging one to a more established player.
When Smith stepped back from the company earlier this year to go on a three-year mission trip in Brazil, Huang was tapped to lead the growing outdoor gear brand.
As part of Smith’s succession plan, Huang was named president of Cotopaxi in May 2022, and took the reins as CEO this July. Smith is now chairman of the board.
“We have a long way to go before we call ourselves a mature brand and have a very nice run ahead of us, hopefully,” Huang said. “But there’s very much a sense of having to grow up.”
Prior to taking over at Cotopaxi, Huang was the CEO and president of Eddie Bauer. He also served as vice president of design and merchandising for Patagonia and product director at The North Face.
In his first extended interview since taking over as CEO, Huang spoke with The Daily about his vision for the brand, the push to refine the wholesale strategy, and lessons learned at other companies that he’s applying to his current role.
In May, Smith told The Daily he expected Cotopaxi would grow by about 50% this year. Huang said that estimate is still holding up four months later.
“Overall business is healthy,” he added. “We’re seeing some of the same headwinds that everybody else is seeing in terms of inflation and some inventory levels being a little higher than we would like. But overall, the trajectory is really good.”
The company has enjoyed solid sales in the travel segment as more people resumed traveling this year.
“Overall, the interest in the brand and story, what we stand for, remains very powerful,” Huang said. “So many new customers are coming to the brand. The attention we’re getting is really validating as well.”
Refining Wholesale Strategy
Earlier this month, Cotopaxi announced it had hired two sales veterans to join its wholesale sales team, Jody Carlson as vice president of global wholesale and Kari Larsen as director of North American wholesale.
Huang said the goal with the hires is to help shepherd the company from an early phase to a more mature one.
“Our strategy going forward is for a very balanced distribution approach,” he added. “We think wholesale, in terms of the number of customers we reach and the number of units we sell, will be the largest channel in revenue.”
Huang said the company expects to maintain that balance despite strong DTC and e-commerce sales.
“DTC is our fastest-growing channel because of our retail expansion and the strength of e-commerce,” he added. “But wholesale will remain close to half the business financially over the next couple of years.”
He said the company is pushing to maximize individual wholesale accounts as well as specialty accounts like those in the Grassroots Outdoor Alliance.
Becoming More Than a Lifestyle Brand
As Cotopaxi invests more in wholesale marketing, it’s also dedicating more resources to the product line to make the brand less seasonal and more about performance, according to Huang.
When the company surveys its customers to ask about their impression of the brand, “we get a lot of mixed messages about how the brand fits in their life,” Huang said.
“One of the important steps for us is to say we’re an outdoor adventure brand, and the stuff we make is going to help you see the world,” he added. “It’s going to help you get outside.”
The goal is to shift away from merely being a lifestyle brand. Future marketing language and initiatives will more clearly express which products are intended for specific activities, from travel to adventure to hiking to camping and more.
“We’re not fully committed to those directions yet, but you’ll see us start using that kind of messaging,” Huang said. “We’re leaning into the outdoor distribution channel.”
For example, a lifestyle brand making a rain jacket is quite different than an outdoor adventure company making a jacket. Cotopaxi’s will be designed with a specific end-use in mind and will have more travel and packability components.
Wholesale Distribution Strategy
While some retailers have told The Daily that Cotopaxi has opened its distribution up too much, Huang pushed back on that, saying the company’s distribution has been “quite stable for a couple of years.”
“We haven’t opened up a ton more accounts in the last year, and we don’t have a distribution-fueled growth strategy,” he said. “The growth strategy going forward is to build more strategic relationships with the existing account base we have.”
Aside from some international expansion plans, the company doesn’t plan to expand the number of doors it’s working with, according to Huang.
Expanding Company Infrastructure
To help with the brand’s growth, the company is moving its distribution center to a bigger facility in the Salt Lake City area.
The new building doubles the size of Cotopaxi’s distribution footprint.
“(The move) is long overdue,” Huang said. “We probably should have done it six months ago, maybe 12 months ago. That extra space is badly needed. We had boxes in the aisles, stacked up to the ceiling. It’s going to be nice to have some room to move.”
Lessons Learned at The North Face, Patagonia, and Eddie Bauer
In his words, Huang has worked at a mix of powerhouse, rebuilding, and values-based brands.
“I learned a little bit about how the consumer interacts with each one,” he said.
Huang spent almost 10 years at The North Face in the late ‘90s and early 2000s. At the time the business was going through major operational challenges.
“It went through a very tough period, but I saw the importance of maintaining the integrity of the brand and what it stood for,” he said. “If behind the scenes things are falling apart, you can still build a company out of that.”
He watched the company revive itself on the strength of its operational discipline, for example.
At Patagonia, Huang said the values-based brand was operating on culture and passion more than strategy. He watched as the company aligned its purpose and passion-driven culture with business metrics that allowed it to create a harmony between doing good business and doing good for the environment.
“When you’re able to unlock and connect that passion at a place like that to business results, the company really took off,” Huang said.
The Eddie Bauer push was to turnaround a brand that has been around for 100 years. While Huang doesn’t necessarily chalk up his time there as a success “in terms of winning,” he learned during that turnaround period to operate the business in a very lean and focused way.
“You learn to be very effective, very efficient, because the brand can’t cover up your mistakes,” he said.
“When you’re trying to engineer a turnaround, your discipline around execution and the calculated risks you take have to be all the more specific,” he said.
The other lesson he learned at Eddie Bauer was from its omnichannel, vertical retail model. Many other brands in the industry start as wholesalers and extend to owned stores and e-commerce platforms. Eddie Bauer was always a vertical retailer and a native DTC brand. The customer data Eddie Bauer accumulated with that model was “super powerful.”
Overall, those three roles taught Huang that having a set of ethics, code of conduct, and established values were all important in how a company does business.
Look for the Builders
During his tenure at the other brands, Huang also learned the importance of hiring people who are interested in building.
Conceptually or otherwise, he said, he looks for employees that want to create something from scratch, whether that’s a process or a product or a team.
He asks, “’Do you enjoy that process of building?’ which is not necessarily for everybody,” Huang said. “Some people are good at operating a machine that’s already there, maybe making it better. But it’s a different mentality when you’re really thinking about building these foundational elements of the company.”
Passing the Torch
Looking ahead, as the business grows Huang wants to make sure the brand is well-defined and well-articulated.
“Everybody has to know what the brand stands for,” he said. “We can’t just rely on the personal embodiment of a founder to drive the brand forward.”
When Huang was hired as president, he had a year to work with Smith and decide what the company needed and where it was going before he became CEO.
Huang said one of Smith’s strengths as a leader was bringing out the best in others.
“Davis’ superpower is he loves people,” he said. “He loves connecting people. He loves uplifting people. That’s the essence of what makes the brand special. Now the challenge is how do we do that with the founder of the company distant from the business.”
Bart Schaneman can be reached at firstname.lastname@example.org.