This story was updated on 5/17/2023.
Read about Cotopaxi executive appointments here
That foresight is coming in handy as he gets ready to hand over the reins on July 1 and leave for missionary work in South America.
“A lot of founders don’t think about succession planning soon enough,” Smith said.
It wasn’t that he didn’t want to be CEO anymore — he wanted to be the CEO forever, he said – but as the steward of the brand he wanted to make the best decisions for the business.
“I’ve been a decent CEO for this business growing to the size that we are,” Smith said. “I also recognize that I’m not the right person to help us become a multibillion-dollar brand, the next iconic outdoor brand.”
He’ll become chairman of the board as he leaves on a three-year mission for The Church of Jesus Christ of Latter-day Saints in Recife, Brazil. Damien Huang, who comes from Eddie Bauer, has been named CEO.
Cotopaxi, based in Salt Lake City, has about 350 employees and about 1,000 retail partners. Last year it surpassed $100 million in revenue, and Smith expects the company will grow by about 50% this year. That’s considerable growth for a company that started in 2014.
Smith said despite the grief he’s feeling over stepping away, he has enjoyed watching his successor Huang step in to lead over the past year.
“Frankly, as I’m watching him lead, I’m thinking ‘Wow, that’s what a CEO is supposed to do,’” Smith said.
Cotopaxi’s recognizable color patterns set it apart from other brands that use more traditional color schemes for outerwear and backpacks.
Smith said he came up with idea for the business when he was living in Brazil.
He wanted to start a brand that was focused on fighting poverty and making a difference in the world.
With that in mind, he assembled a founding team that included three designers. They met in a cabin in Utah in 2013.
He showed them a video of another outdoor brand where a guy jumped out of a helicopter and skied down a mountain, outrunning an avalanche.
“I told them, ‘This is who we are not,’” Smith said. “We will not win by being like everyone else.”
He knew the brand needed to be unique and to stand for something different.
“If we try to compete for the same customers that everyone else is competing for, it’s going to be a tough road,” Smith said. “But if we try to create a more inclusive outdoor industry, a brand that welcomes more people into the space who have traditionally been excluded, that’s how we’re going to win.”
It wasn’t his idea to create a “super crazy colorful product,” Smith said. That was his designers. But they understood the mission to do something different.
Having grown up in Latin America, Smith said the colors fit well with what he saw in that landscape.
“I love seeing it,” he added.
When Cotopaxi launched in 2014, Smith said outerwear in the outdoor industry wasn’t very colorful, but that’s changed a lot in the last nine to 10 years.
“We understand that there are some customers who won’t buy our product because of it,” he added. “But at the end of the day, that’s what sets us apart.”
Doubling Down on Core Products
Looking ahead, Cotopaxi will double-down on its core products – packs and outerwear.
Smith said those are both massive market segments and worthy of continued focus.
“We don’t need to go expanding into a bunch of other areas to build the brand we’re looking to build,” he added.
For example, the company offers a lot of mid-layers right now and plans to expand on that within the outerwear category.
Another example: Cotopaxi doesn’t currently offer a school pack that can hold a laptop, books, and a water bottle, something that the brand plans to tackle in the future
As for wholesale strategy, Smith views it as a pyramid, with specialty, regionally based shops at the very top.
“When people discover our brand in those places that’s a win for us,” he said.
The next level below that is a REI or Backcountry, then Scheel’s and Dick’s Sporting Goods.
“Those are all brand-accretive retailers,” he said. “Retailers that are going to build our brand when people discover us there.”
Then there are brand-neutral retailers who are not accretive, but not dilutive to the brand either. Those can help Cotopaxi get more reach and drive sales, Smith said.
At the very bottom of the pyramid are mass retailers and department stores, where if someone finds a Cotopaxi product there it might damage the brand. Cotopaxi doesn’t sell in that level of distribution.
E-commerce v. Brick-and-Mortar
Having launched as a direct-to-consumer, e-commerce brand, Cotopaxi remains strong in that area. It’s still one of the company’s fastest-growing channels.
“Honestly, we have not seen a lot of the same struggles other brands have experienced lately in terms of e-commerce,” Smith said. “We still see a lot of efficiency, a lot of great growth in e-commerce.”
Cotopaxi has 10 retail stores in the United States and three in Japan, and wherever it has retail stores, it sees a strengthened e-commerce business.
The company usually puts stores where it already has an established e-commerce base, but adding a store also leads to lift in digital sales.
“Physical retail is definitely an important and relatively small part of our business,” Smith said. “It’s going to continue to grow and scale along with us.”
Smith declined to say how many stores the company plans to open, but he said it has big plans for the next five to 10 years, which includes expanding its U.S. brick-and-mortar footprint beyond its current presence in the American West.
As a certified B Corp, sustainability and impact on the planet remain core focuses for the brand.
About 97% of the company’s products are made from remnant, recycled, or responsibly made materials.
“We’ve committed that to be 100% by 2025,” Smith said.
Smith takes a long view into the future when he thinks about his brand’s legacy.
“If there’s going to be any criticism in the next 100 years of our generation, people will say ‘Wow, how were they so blind to how they were destroying the planet?’” he said. “They knew about it, and they kept doing it.”
To add to that, Smith sees humanity and the environment as inextricably linked.
“You can’t protect one without protecting the other,” he said. “Our brand will continue to be focused on people and humanity, and on fighting and eradicating poverty. But we can’t say we’re doing that if we’re destroying the planet on the other end with how we’re making our product.”
Bart Schaneman can be reached at firstname.lastname@example.org.