Backpack brand Mystery Ranch is dealing with the same challenges that the rest of the industry is facing, including an inventory glut, conservative consumers, and retailers trying to slim down stock levels.
“Wholesale in North America has just been tough,” said Alex Kutches, president of Mystery Ranch, based in Bozeman, Montana. “I don’t know if you recover from that given the fact that the hardgoods business is a Q2, Q3 business and we’re halfway through Q3. Whatever’s been missed that was planned from all the brands, there’s no way it’s going to get made up in the next month and a half.
“What’s interesting, though, is when we look at our direct-to-consumer business, particularly as an emerging brand, we’re hitting our goals and growing.”
Kutches spoke with The Daily about how the brand is grappling with industry-wide issues, its wholesale strategy and future plans.
Working Through Challenges
Mystery Ranch specializes in four types of backpacks – outdoors, hunting, firefighting, and military. The outdoor segment is the largest part of the company’s business.
Overall revenue this year might end up close to flat compared to last year, according to Kutches.
He’s seeing warehouses, showrooms, and retail floors loaded with stock.
“Sales didn’t happen,” Kutches said. “My guess is you’re going to see some significant promotional activity in the next five or six months, and it’s going to take until March to chew through things and get healthy.”
Mystery Ranch at Public Lands in Pittsburgh. File photo courtesy of Shop Eat Surf.
While this year looks tight compared to last year, the business has grown substantially since the COVID-19 pandemic.
As a privately held company, Kutches declined to say how much the company has grown financially, but the business is “way up over 2019,” he said.
By July 2023, for example, the company had already beat full-year 2019 revenue numbers. For the outdoor segment specifically, the business is about four times bigger than what it was in 2019, Kutches said.
To work through the bigger industry challenges, the company is seeking feedback from customers about what’s working and what’s not, according to Kutches.
Mystery Ranch is taking that feedback and trying to be tactical and specific about where it invests in inventory, which means focusing on its bestselling products and not getting too carried away with nice-to-haves or big extensions, Kutches said.
Mystery Ranch Wholesale Strategy
Mystery Ranch thinks of itself as a “best-in-class” pack, according to Kutches, and its packs are priced accordingly from an open-to-buy standpoint.
“We have some things that dip into that broader market at a more affordable price point, but in general we really try to be best in class all the way across the board,” he added.
To that end, some retailers offer better opportunities for larger volume plays at lower price points. The company can sell their full range of products in certain stores and do well on volume. While other, more specialty stores are limited in what they’re willing to carry, but still offer good opportunities to sell Mystery Ranch’s larger, more expensive backpacks, for example.
Photo courtesy of Mystery Ranch.
Mystery Ranch History
Mystery Ranch as a brand started in 2000, but founders Dana Gleason and Renée Sippel-Baker were making packs as far back as the 1970s.
At the time, Gleason had a shop fixing backpacks in Bozeman, Montana. While working on repairs, he developed his own day pack, a tactical pack, a duffel bag and a hip sack for local customers. The brand grew from there into Dana Designs with a focus on a chassis for their packs that transferred the load to the carrier’s body. That brand was sold in the late ‘90s.
Gleason came back in 2000 with Mystery Ranch. Now the company has 106 employees and sells to about 450 retailers across North America.
The company prides itself on providing load-bearing gear that can handle the rigors of various activities.
“We think we do a really good job of creating a great interface with the human body,” Kutches said. “You don’t have to pack your pack a certain way to not feel a thing. You can load it up with all kinds of crazy stuff.”
As the brand has evolved, its products have gotten less modular. At first, customers were essentially designing their own pack. Mystery Ranch is now more reliant on sizing configurations that make for a smoother purchasing experience.
“This has been easier for the consumer to fit and also easier for the dealer to stock it,” Kutches said.
Outdoor Community
Initially the outdoor segment of the brand was targeted at the long-haul backpacker. But that’s changed as the products have become lighter and smaller. The load carriage and fit are different now than what they were when the brand started, Kutches said.
The company is also offering more day hiking and everyday carry products, with a lot of that category’s growth coming in overseas markets. “That’s more for the business traveler – folks getting on a train heading to the office, with a workout outfit in there along with a laptop and a lunch,” Kutches said.
Those lighter packs are in addition to products for more technical pursuits such as climbing and skiing.
Photo courtesy of Mystery Ranch.
Benefit of Different Segments
With the four product areas – outdoor, hunting, fire, and military – the brand can learn from and test products with different uses. For example, the ventilated back panel was first designed to add breathability to a military pack. That functionality was then applied to the Bridger outdoor bag line.
“It’s really cool that we get to spread out our learnings and share that,” Kutches said. “It’s a strength. It’s also a challenge.”
It’s a challenge because at the same time, the company is competing against some brands that specialize in only one area.
“On the whole, it’s tremendous for us to have the diversification of the business,” Kutches said. “We’re more balanced today than we used to be.”
New for 2024
For Spring 2024, the company is launching a new line of technical backpacks designed for lightweight backpacking, hiking, climbing, and trail running.
The Gallagator, for example, is tapping into the trend of incorporating features from running vests where the shoulder pads have pockets instead of pockets on the back of the pack.
As the company approaches 25 years in business, Kutches is thinking about how to celebrate.
In 2020, to mark 20 years of the brand, the company auctioned off 10 backpacks that were specially designed by team members for specific purposes.
Kutches said he’s not sure what they’ll do for their 25th anniversary, but “you gave me a great reminder that I need to work on that.”
Bart Schaneman can be reached at [email protected].
