Colorful outdoor blanket company Rumpl was on a rocket ship of upward growth through the pandemic, even being named fastest-growing camping brand in outdoor specialty for 2022 by NPD’s U.S. Outdoor Sports Retail Performance Awards.
Then the boom the outdoor industry experienced during the COVID-19 pandemic faded, and Rumpl’s CEO Wylie Robinson was forced to learn a few hard lessons about cutting back after a period of rapid expansion.
As a first-time business owner, Robinson had been operating with high energy and liked to try out new ideas.
“As a business, we’ve always tested lots of ideas and seen what works,” he said.
That was working well through the COVID years. Rumpl saw more than 60% growth in 2022 and sales are up 450%-500% from 2019, according to Robinson.
The Portland, Oregon-based company scaled up based on what was happening in the market during the pandemic, but that brisk business hasn’t carried into this year, putting pressure on the company’s cash position and forcing job cuts.
Robinson expects 2023 revenue to fall 15% from 2022.
“Business is a little soft for us at the moment, relative to the last three years when we’ve been on a tear and growing a lot,” he said. “If you look at our compound growth rate over five years, we’re still very, very healthy, but we will be slightly down this year. Definitely 2023 has presented some headwinds for us. It’s a right-sizing year for us.”
The Daily spoke with Robinson about how he’s consolidating the product mix, the pitfalls of Rumpl’s NFL licensing deal, and how the business is moving into a more mature stage.
Rumpl Culls SKUs
In 2022, Rumpl had to engage in a lot of clearance activity because it sat on too much inventory.
One way the company is right-sizing this year is evaluating which products are working. Robinson’s consulting point-of-sale data to help lead the decision making about which SKUs to cull.
During the company’s hyper-growth period in 2021 and 2022, Rumpl offered a wide breadth of choice to consumers with 60-70 SKUs, according to Robinson.
“Like any business that proliferates a SKU count, you end up with some real winners and some real dogs,” he said.
Rumpl is making a concerted effort to rationalize each SKU and make sure it’s only putting out products that will be “material revenue drivers,” according to Robinson.
“It’s an interesting emotional experience for the business to go through, where revenue is a little down, and the SKU count is a little down,” he said.
Robinson said having to make a headcount reduction adds an “emotional component that’s felt by all the employees,” but it’s the right call to improve the efficiency of the business.
During the rapid expansion of 2021 and 2022, Rumpl was “pretty aggressive” about expanding into new markets, according to Robinson.
He’s more cautious about that now.
For example, Rumpl worked out a deal to sell blankets at all NFL stadiums with all 32 teams’ logos for the fall 2021 season. Rumpl paid a company with the master NFL license a small commission to get in the side door.
For some of the more popular teams like the Cowboys and Steelers they did two SKUs. The factory Rumpl uses requires a 1,000-unit minimum, so the company had to outlay cash for more than 40,000 units. The sales window was narrow – the deal was for only one season.
Robinson said it was a “real inventory risk.” Some teams don’t sell that much merchandise and he was stuck with a lot of clearance activity for the less popular teams.
“It was certainly less lucrative than we had modeled,” he said. Robinson pointed out that for many companies 20%-30% of the SKUs do the bulk of sales and the remaining 70%-80% languish. He said that was also true for NFL teams.
Rumpl has no plans to do something similar again. Now that the company has less cash and resources to play with, Robinson’s focused on winning SKUs, winning retailers, and winning consumer segments.
“For us, the winning consumer segment is definitely the core outdoor consumer,” he added.
As that period of high intensity and growth slows down for Rumpl and the culture shifts, Robinson has brought in more seasoned executives and is taking advice from the company’s board and investors.
“Part of that is building more efficient processes and more efficient ways of doing things,” he said. “It definitely feels like less of a flurry. Like less is happening.”
Robinson said it feels like the business is graduating from an “adolescent, opportunistic mindset” to a young adult phase that includes getting its finances in order.
For its store strategy, Rumpl approaches prospective retailers with a detailed pitch backed up by POS data to guide the stores in their purchasing decisions.
“We have a really good reason to believe that these are the SKUs that retailers should be putting in their stores so they will turn inventory quickly,” he said. That usually means simple assortments that are easy to sell and easy to buy, “certainly easier for the consumer to wrap their head around.”
He referenced a study where a store offered 45 different types of jam, compared to one that offered six. The store that offered six types sold more than the one with 45 because it avoided paralyzing its customers with too many choices.
“We’re basically taking that approach with our assortment,” Robinson said. “That’s making it a lot easier on buyers who are under tons of stress right now.”
Rumpl is hearing from both larger retailers and smaller specialty stores that they have a “mountain” of inventory and only want to spend dollars on products that will turn. “They can’t buy products that are going to sit in the backroom,” he added.
Looking ahead, Robinson is excited to see the tough choices he’s making to consolidate products and his workforce play out in the market.
“I’m really looking forward to going back to a bit more of a scarcity model, where the supply is matching the demand for the product,” he said. “Seeing what that’ll do to the business and the mechanics of the business. I think it will very quickly start to feel like winning.”
Bart Schaneman can be reached at email@example.com.